Should we purchase a home outright?

Question

My husband and I have the wonderfull opportunity to purchase a home outright. I am aware of the tax breaks we would get if we were to finance a home. We would still have PLENTY left over (after buying a home outright), to secure our living AND retirement by investing a portion of that. My question is this: should we STILL finance a home?
Thank you in advance!

Answer 1

Sure. You can always leverage the home later.

Answer 2

It depends on how you would put the money to use if you didn't use it to buy the house. Let's say your mortgage interest rate is 5%. If you can find an investment that will return more than that, you should put as little into the house and as much into the investment as you can. You will be making more on your investment than you are spending on the mortgage interest, plus the interest is tax deductible if you itemize. If your investment return is much lower than your mortgage rate, taking into consideration the deductible mortgage interest, then you are better off buying the house outright. You can always refinance to take cash out later if you find a good investment.

Answer 3

If you keep the money in the bank you will only earn 3 and one half percent interest is the best you can do..Your finance on your home will be at least as 7 percent so you will be losing money .. If you make mortgage you will have to pay the same taxes and and fees with the purchase that you will if you pay out right.. But at the end of the year you can get a tax right off but if you dont have that much tax right off its not worth it..I think personally buying outright will be your best bet..If you need additional info on this ..my wife is a financial genius and can help you figure out the best way to go on anything like this but buying outright is really to your advantage.. if you need anything just email us we wil be glad to help .We are older and been there done that and still doing it. so feel free..to ask.

Answer 4

The money you use to invest today coupled with the equity (future value of your home) tomorrow, will probably be of greater value to you in the future. A good Certified financial planner teamed with a Certified Mortgage Planner can work with you to map an ideal game plan. I'm 39, have several investments, and comfortably liquid. above all advice I've listed, previous post and future post (gong to be a few all telling you to pay cash) seek the advise of the financial planner, and mortgage planner. Both must be certified. Good luck

For Certified Mortgage Planner in your Area: http://www.cmpsinstitute.org/public/menu

For Certified Financial Planner in your area:http://www.fpanet.org/

Answer 5

Yes you should buy it outright because you don't have to worry about debt instruments or a payment for thirty years most people don't get that opportunity so rejoyce in the fact that you don't have that debt over your head and good luck & Godspeed.

Answer 6

No...if you can pay cash pay cash....the tax break is stupid. You send the bank 20K to save 4K....pay yourself the 20K instead.

If you owned the house outright you wouldn;t put a mortgage on it to pull out the cash right....if you where you finance the house it would be the same thing....

CONGRATS

Answer 7

People think that its somehow smart to finance a home and pay interest if they dont have to.

You dont get the interest back, dollar for dollar-- you only get a deduction which means you get a small fraction of it back.

Pay for it in full, if you can.

Answer 8

are u looking for tax deductions this season? cant find enough write-offs? if you answered yes, take a mortgage.

Self-employed? S-Corp? W2 wage earners? Property Investors filing schedule E?

best answer = consult a tax professional. Don't have one? get one.

If you need a mortgage, e-mail me I will help further.

: )

Answer 9

If you can do it outright, then I see no reason to not do it.