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 ...
Do not buy the most house you can get a loan for, instead buy a home you can afford to pay in 15 years, e.g., make an extra $100 payment for every $60,000 of your loan.
Never borrow money on a credit card.
Use your tax return for paying down your loan.
When you buy a house or car, ASK the Lender to buy down the Rate (on cars this works). The money you save on your home loan or car loan by paying it off with every spare dime with put 3 kids thru college; or you could retire at age 55.
If your are paying down a credit card at 25-29% interest you just keep doing it, month after month, paying over a $100 a month on a balance as low as $3,000 you owe. You make the minimum payment and you essentially pay two times the price of the actual product. Many people keep $4,000 - 10,000 on credit cards. A thirty percent rate on $10,000 is a similar amount of money you would pay for $40,000 auto loan.
I have only paid interest on a credit three times (3 different months) in my life, and one of the times was when I moved to The Netherlands, but I paid that card off immediately.
I learned my lesson on financing products in 1974 where I bought a black and white TV with a 10 hour battery for $140 but the finance rate was $17 in interest and paid over 18 months. After that, I never spend a dime I didn’t own. I never loan anyone money, but I might give sommeone money - people tend not to pay you back, or they leverage their borrowing scam and eventally try to screw you; I’ve watched this happen my own life to others.
When I was younger, my goal was to have whatever home I lived in paid off by the time I was 60. I missed it by two months. Now 66 and retired, it is so nice not to have a mortgage payment every month. Plus, my house has gained about 100K in value in the past five years, which eventually my children will realize.
Oh ... so in your other articles you weren't being honest?
bkmk
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