I am so glad to know that you have recovered!
You should speak with your CPA or financial advisor to weigh the pros and cons of paying cash for a home. If you can not get a loan due to your poor credit or if the interest rate is higher than you can make in an solid, safe and sure investment, cash may be your answer.
However, with the incredibly low interest rates available, you may be able to make more money by keeping your cash working for you in another investment, why would you want to lose that extra investment income?. EX. If you can obtain an interest rate of 3.5% but you can get that much or more in dividends (some non taxable) why not keep your money working for you? When interest rates go up, as they will eventually, you will have the liquidity to earn a higher return on your money. You could use the dividends to pay your mortgage, at even lower rate than available in the mortgage market thru your investment advisor or brokerage firm if you have one.To do that you would have to keep some % of the money in an account for the lender's security however, that money would still be earning interest or dividends and you would not be using your principal. Remember to factor in the tax advantages of a home loan in your consideration, but with interest rates at an all time low, there isnt much of a deduction currently.
There are many possible answers to your question, and many ways to finance a home, depending on your individual investments, available funds and comfort level.
I stongly advise that you speak with your CPA or meet with one to help you make your decision.
If i can help you in anyway, feel free to contact me.
Myra Ephross ABR,ASR,ALHS,CHMS,CNE
Prudential Anderson Properties