buy a house directly or pay a mortgage?

Answer 1

It all depends. Do you plan on living in the house for the entire length of a 30 year mortgage? Or are you more apt to move in 10 years?

If you answered 10 years then go with a mortgage. The house would be an investment for you. This way you will have to put less of your own money into it, you build equity, and you get better tax breaks from the government. You would be in a much better situation to make a substantial profit.

If you plan on living in it for longer than 10 years, then pay for it out right if you want to. However, should you decide to sell it one day you could be suffer a loss.

Talk to your bank or mortgage lender to find out the advantages or disadvantages of doing either. A friend who is in the business would be the best route because you can better ensure that the answer you receive isn't tainted.

Good luck.

Answer 2

Compare the saving interest rate with the mortgage interest rate. Putting money into a home has the same effect as saving the mortgage rate. If a mortgage rate is 10% and savings is 5% put the full amount into the home. If they are fairly close you will have to account for the interest deduction on a mortgage.

Answer 3

Chances are that you will be able to get a better deal paying for a home in cash. If you have the ability to take CASH MONEY with you when you plan to negotiate a house, you will be able to get an amazing deal. Sellers will be affected by your power to produce the CASH to pay for the house. So, combining the inevitable discount you'll get along with not having to pay interest or a morgatge, I'd definitely purchase it outright.
If you decide you want to move, you can always rent your first property and finance propterty #2.

Answer 4

Same opinion as BrewMan

Answer 5

If you can afford to pay it all out, DO IT! Why pay interest?