Is it true that if you have the money to say out a car or a house, then you don't need credit or a cosigner?

Question

My friend told me that.

*Not say-BUY OUT.

Answer 1

I agree with dietcoke with one exception. The ONLY tax deduction for homeowners that you lose by not having a mortgage is the interest on the mortgage. Property taxes, etc. are still deductible. If they are not more than the standard deduction, you were not benefiting from them anyway. As for the interest. If you are in the 25% tax bracket, and pay $10,000 in interest, you save $2500 in taxes. Restated, you give the bank $10,000 to avoid sending the IRS $2,500. I'd rather keep the $7,500 difference. If you want to spend $10,000 to reduce your taxes by $2,500, charitable donations work just as well.

Answer 2

I don't quite get your question, but I think you're asking if you need credit to buy a house or car if you actually have the cash to do it. No, you don't have to. This obviously means you never have to pay interest and the property is automatically yours, but you will not receive tax credits that people with home mortgages get.