Posted on 01/14/2024 11:49:06 AM PST by where's_the_Outrage?
Let's be honest: While I intend to buy a house next year, and have just met my savings goal to make it happen, I'm not capable of paying cash for the entire purchase. Instead, I'll be shopping around with the best mortgage lenders and financing my home purchase (except for my down payment).
But in some alternate universe where I have more money to throw at a home purchase, I still wouldn't buy a house outright in cash. Here's why -- as well as you might want to think twice, too.
1. A home is not a liquid asset While you may lose money in the process of converting stock shares to cash (if you have to sell at a time when values are down, for example), it's a fairly straightforward process to turn these into money if you need it.
2. I could likely earn a higher return by investing This point is much less effective given that mortgage rates are at their highest level in over 20 years, but it still bears discussing.
3. I might not have money left over The final reason I wouldn't pay cash for a home purchase is that I wouldn't want to tie all my money up.....
Sinking all your spare cash into a home purchase could have you scrambling for cash for emergencies and missing out on the chance to invest and earn a higher return. Consider all your options for buying a home, and make the decision that's right for you and your finances.
(Excerpt) Read more at msn.com ...
I paid cash for my whole off grid, self sufficient compound.
The freedom from making any payments (other than my internet connection and property tax) is worth billions to me for peace of mind.
It’s still cheaper to rent.
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Not in my area, one bedroom apartments are $1500 a month, with small 3/2/2 houses getting $2400 a month. Keep in mind another ‘06 crash will wipe out gains.
I bought my house in 08, a foreclosure for $242,000. The house was built for $326,000. My mortgage is $800 a month, at 1.75 percent interest. Had I paid cash, I would not have had cash to invest, which brought 6-15 percent a year.
To each his own, point is do not ever say a housing crash will never happen….we are due for another one.
I paid cash for my last home. Knowing that I would soon retire (which I’ve done).
Google tells me the average mortgage payment today is $2,883. I can’t imagine making that payment while retired.
Dude...you’re talking about a mortgage you took out 16 years ago. Not today’s rates.
It’s still cheaper to rent.
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Not in my area, one bedroom apartments are $1500 a month, with small 3/2/2 houses getting $2400 a month. Keep in mind another ‘06 crash will wipe out gains.
I bought my house in 08, a foreclosure for $242,000. The house was built for $326,000. My mortgage is $800 a month, at 1.75 percent interest. Had I paid cash, I would not have had cash to invest, which brought 6-15 percent a year.
To each his own, point is do not ever say a housing crash will never happen….we are due for another one.
1 and 3 may apply to most. It’s quite possible to end up ‘house poor’ where you have this great asset and not enough (or not as much as you wanted) to live on.
On the other hand you get to live in the great asset. Others may really want a life with big vacations and too much house is a bad idea for them.
Still others may see the house as just part of an investment package (like, probably, the article writer) in which case all the common sense around balance comes into play.
Still, choose wisely so you’re also not stuck in a great house that depreciates both financially and otherwise due to changing circumstances.
Yes, and in today’s insurance world it is a slammer. Before my father died about 3 years ago, I had a different opinion of insurance companies. 6 months before he died his home had damage to the roof due to heavy rain and high wind (we are deep in the heart of Texas, not near it’s coast) and the company refused to pay a single dime. So we changed insurance companies. As a consequence I changed my insurance company too. (3 homes and 5 cars between dad and I)
Later I found out about the ESG crap (scam), and found my old and new insurance companies were both flying the ESG flag. The first company was bragging about it on their corporate website and had a pretty adult Chinese lady telling how great a corporate citizen the company was.
I found out later that the first insurance company was using the ChiCom Social scoring system to evaluate their customers. Ahhh Sooo.
I fixed my dad’s home roof. Actually helped the contractor who did the install.
The old rules are no longer in place.
I did finally find a reliable auto insurance company that is not involved with ESG. Have not yet found a home insurance company who is not.
Not sure how long, but for now, un-required insurance makes no sense to me, Don’t own anything on my homes. I’m 76, so not sure I will ever carry home insurance on my homes again.
If they don’t pay claims and rate your policy by ChiCom social scoring system, how long should I stay with them?
Make a web search of “you insurance company name”, “ESG” and see what you get. You probably will be surprised.
The finance industry, banking industry and mortgage industry are all into the current global property theft scam.
The WEF and the globalist corporations are planning to take all the property in the world. They really think they can.
Klaus: In ten years you will own nothing and be happy. (eating bugs)
NOT going to happen.
Yeah.
MF is in the invest business.
They’re not exactly unbiased.
I own 14 houses paid cash for each you often get much better deals when paying cash
Wow. Nice.
In 2009 our home lost $100k in value. So did everyone else. It rebounded and tripled in value. We paid it off. Now it doesn’t matter if prices go up or down.
You will never go wrong long term investing in mutual funds indexed to S&P 500 (or something similarly diversified).
Sure, there are some bear markets such as what we had last year. But long term, you will find yourself way ahead of the game. Also, if you are a long term investor, bear markets can actually work to your benefit as during that time, you are purchasing additional stocks at a lower price. That is called dollar cost averaging. When the stock market goes back up, you will have even more shares due to that DCA.
Even if you have a 30-year mortgage, if you know you can’t pay it off in 10 years, then it’s too much for your budget.
What good is cash, if you own your home outright, you earn cash every month at work and pay a very small amount out. Like 6K income, 1K in utilities and groceries. If you lose your income, you lose your house and your home with a mortgage. For the same reason you buy cars cash. You buy computers, boats, dirtbikes et al cash. You really cannot afford them if you cannot do so.
I made big money on flipping homes. Started with a 40K fixer, worked on it weekends and sold for 120K. Sold that and bought a nicer one for 147K. Sold it for 260K and bought one for 180K. Wife says, lets live in it. So we mortgaged it, put money away. She split with the$$$’s, I said good riddance, then the market crashed. I sold it for 127K in Obamas crash, and bought a MH on a lot cash. NEVER again. The worse stress of my life was watching my investments, and savings go with the wind. #1, never share banks with a spouse. #2, don’t listen to their financial advice. YES, I am single now for 12 years.
Precisely, my FRiend!
We share a similar experience and observation. Thanks!
Thanks. At my age (in Medicare) I should have something to show for all those years of hard work.
I’m really sorry about your loss.
This is very off subject.
Been married for 46 years now.
We all most killed each other a few times.
My advice is this; humbleness is your friend.
selfishness is the enemy.
I guess my point is the average person has no idea what they actually paying for a home and how much interest is paid over 30 years and the mortgage business is so profitable for the lenders and how much they can save by financing for a shorter period or paying cash for things when possible
Same goes for credit card revolving lines of credit
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