2006-10-15 06:54:16 · 6 answers · asked by Joel F 2 in Business & Finance ➔ Renting & Real Estate
The main advantage would be security. No one can take your home from you for not making a mortgage payment. The negative is it doesn't make sense from an investment point of view, assuming you have alternative investments that yield more than the appreciation rate for homes. Over the next few years in the US the appreciation rate is expected to be flat.
2006-10-15 07:15:54 · answer #1 · answered by tarl_cabot_2k 2 · 0⤊ 0⤋
Massive savings in interest charges.
The total interest payable on a $100,000 30-year 6% fixed mortgage is $115,838.19. At 8%, the total interest jumps to $164,155.25.
If you can invest the price of the home in a vehicle that yields a higher rate of return that the interest rate on the mortgage, get the mortgage. If not, pay cash.
2006-10-15 13:59:31 · answer #2 · answered by Bostonian In MO 7 · 1⤊ 0⤋
You must be doing well if you are in a position to pay cash for a home.. The obvious advantage is no mortgage payment... In my view having no mortgage pmt and owning the deed to your home is far more valuable than the tax/mortgatge interest benefit most take who have a mortgage. If you ever need to tap into the equity, home equity loans / lines of credit are easy to obtain.
2006-10-15 13:58:34 · answer #3 · answered by Heatmizer 5 · 1⤊ 0⤋
Advantages:
-you do not pay any mortgage interest, just rates
-the house is yours
-you can borrow money against the house
Disadvantages:
-as you do not pay mortgage rates you cannot make any deductions on your tax return
-your capital is bound, as in non liquid until you borrow against house
-the AV (Annual Value) of your house increases, for which more tax is liable (as far as I know),
Hope this helps, cheers!
2006-10-15 14:09:58 · answer #4 · answered by Gary H 3 · 0⤊ 0⤋
A substantial interest saving is probably the most apparent.
Less of a strain on your monthly cash flow is right behind it at number two.
2006-10-15 13:58:02 · answer #5 · answered by Jack 6 · 1⤊ 0⤋
no interest and no note !
2006-10-15 14:03:17 · answer #6 · answered by Scorpius59 7 · 1⤊ 0⤋