Is it better to buy a house for cash, and use up all the money, or is it better to just put down a partial downpayment, and use the money for other things (IRA, buy car for cash, put downpayment on car, etc)
I would personally think that avoiding ALL the interest on a mortgage would be quite worth it, but I am not an expert.
I also don't think it is worth it to have ANY payments on a car, and therefore think it is right to pay cash for any car I would buy. Paying interest on a thing that doesn't increase in value would be a big mistake in my opinion...HELP!
2006-10-03 03:30:08 · 9 answers · asked by gg 7 in Business & Finance ➔ Personal Finance
Do take a small amount of loan so that the finance company gets all your documentation in order. If you have the cash later you can pay back slowly and as per convenience. Also home loan will help in waiving tax. Go ahead and buy your car & other stuff
2006-10-07 01:56:14 · answer #1 · answered by ¨°º¤•§îRîu§ ¤[†]¤ ߣã¢K•¤º°¨ 3 · 0⤊ 0⤋
You should put down 20% and then get a 30 year fixed mortgage for the rest. Mortgage rates are at historic lows and it is relatively easy to make more than you pay in interest through other investments. If you use up all your money on your house, you won't have money to invest elsewhere. It also means that your investments will not be diversified which is dangerous.
However, if you are VERY risk averse, it might make sense for you to pay off the house, but it is not the best idea financially.
Good luck!
2006-10-03 13:22:24 · answer #2 · answered by personal_finance_101 3 · 0⤊ 0⤋
I think we see this the same. A car, is always a loss purchase, and if I could avoid debt on that, I would. (I would rather have that 10-16k debt on the home that will build equity).
As far as IRA's go, that's hard to say. How old are you? Do you plan on selling this home before you retire? I suppose if it were me (24, married, no kids, in first home) I would pay off the vehicles first, put 10% into IRA's and investments, and dump the rest on my mortgage. That would probably leave me with about $10,000 which would probably go to emergency savings, and some fixes on our old house.
2006-10-03 11:34:56 · answer #3 · answered by daisyk 6 · 0⤊ 0⤋
This is real estate you're talking about. Look at your credit first--is is good--bad--so-so?? Putting a good chunk of money down on this house is a much wiser thing to do than just spending all you have on it. It keeps your credit in great shape and you have money left to invest in other things. If you earn enough money to make a decent on this house--then only put a chunk of money on it and make payment for a few years. As, I have said. Have you determined if this house is worth this kind of money? What kind of neighborhood, where, condition and etc. You need to really be serious for that kind of investment. Real estate is a good investment. If you need more help--talk to an investor and find out for sure--a good qualified investor. Have a good day!
2006-10-07 17:24:29 · answer #4 · answered by Kimi S 1 · 0⤊ 0⤋
Usually a home loan is for 30 years most of your monies go for interest me personally I would buy my house for cash,,,no mortgage payments...wow that would be awesome.....not only that houses appreciate in value so you can always sell it in 10 years and make a profit off of it and all that is cash in your pocket
2006-10-10 20:55:04 · answer #5 · answered by - 4 · 0⤊ 0⤋
Why don't you buy a less expensive home, pay it in full and use the remaining money for the other things you mentioned. These days it's always better to own something outright, then to have to make payments.
2006-10-11 09:19:26 · answer #6 · answered by lucyblue_1999 2 · 0⤊ 0⤋
it is best to have a mortgage. that way you are accruing equity. Your home will appreciate in value as long as you maintain and/or improve it. A car however, you should pay cash for if you can. They depreciate as soon as you drive off the lot. There are several options in regards to how to finance your home. Talk to your bank or your investment manager for the best options for you.
2006-10-03 10:37:17 · answer #7 · answered by Anonymous · 1⤊ 0⤋
I'd get a tax deductible mortgage and invest as much of the $250,000 as you can.
You can probably get a home mortgage for <7% (that might represent a 5.5% tax effective rate). I'd say you could fairly easily earn more than 5.5% over a 30 year time period on your investment.
2006-10-03 19:06:10 · answer #8 · answered by derek 4 · 1⤊ 0⤋
Why pay interest?
2006-10-03 10:32:50 · answer #9 · answered by tommy w 2 · 0⤊ 1⤋