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House costs 575,000.00 and taxes are 8500.00/yr. I am a single mom with a son going to law school in August- I have a low income-50,000.00 and do not want to worry about a mortgage payment as I may lose my job due to a corporate merger-I can claim the taxes on my return.... I really do not want to worry about a mortgage at this point in my life-any ideas>

2007-06-20 00:36:28 · 10 answers · asked by sunflower 2 in Business & Finance Credit

10 answers

do it if u can. the intrest will pile up over the years.and if u do own it outright, u can always sell it or get a loan against it if u lose ur job, so u can live and find a new 1, then pay off a smaller mortgage

2007-06-20 01:32:06 · answer #1 · answered by Anonymous · 1 0

There are downsides to both. Paying cash to buy the house means using up cash that you could invest elsewhere for the future. Mortgaging means a monthly obligation that sounds like could become burdensome for you.

My quick and simple answer is to do both, if you can put a large amount down on the house, take a smaller mortgage (keeping in mind the tax advantage of the mortgage interest). and invest the rest of what you have. AND Put away at least a years worth of mortgage payment in a money market or something (they earn a higher rate than a regular checking account). That will help insulate you if something does happen to the job. You also gain equity, so that if you are forced to sell the house, you receive something back from it.

I am a certified mortgage planner. We look at the goals and plan accordingly for our clients.

The first question is the obvious - do you have 575K plus closing costs to pay for the house in cash? Where are the funds coming from? If you are taking them from a 401k or something like that, it might not make as much sense.

The next is - are you paying for your son's schooling, or is he shouldering a portion or all? How does that affect your finances?

I would first of all wonder if you are taking on a house that is too much. You are obviously in a higher market area, given the price of the home. Based on the minimal information given, I would venture to wonder if you could even qualify for such a large mortgage, if you have other secured debt, the Debt to Income ratio is going to be on the high end. That could have an impact on what is available to you. So back to my quick and simple answer - see above :o)

Feel free to contact me with any questions - as a CMP, I try to be a resource. whatcaniafford@yahoo.com

2007-06-20 02:05:05 · answer #2 · answered by Nichole O 2 · 0 0

If you can invest your money at a higher rate of return than your mortgage rate then you should get a mortgage and do so. If you ever need to pay your mortgage without a job you should be able to do so off the interest from the money you invested if you are truly getting a higher rate of return. History says that the stock market returns 10% APR. Your mortage rate will certainly be much lower.

2007-06-20 00:47:53 · answer #3 · answered by Anonymous · 0 0

Yes it is the best thing to do and first time i am getting this type of question that you want to pay in cash if you can you can do it.It is good but as your salary is less so think first will you be able to pay all at a time . Otherwise you can go for some for few years.
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2007-06-20 00:56:14 · answer #4 · answered by Della G 1 · 0 0

Paying for a house with cash makes the most sense, period. No more questions asked.

2007-06-20 02:00:05 · answer #5 · answered by Anonymous · 0 0

I would pay cash for it if I had the money. Your income is only $50000/yr & any home over $150,000 may be more than what you want pay monthy.

2007-06-20 05:54:00 · answer #6 · answered by J R 2 · 0 0

Obviously if you could afford to pay cash for it.. you would. Why pay the bank all that extra interest if you dont have to?

2007-06-20 03:13:54 · answer #7 · answered by Anonymous · 0 0

u can pay in cash ( why not ) but as u have low paying job do u have the funds to pay this huge amount all in cash ????

2007-06-20 00:40:44 · answer #8 · answered by Anonymous · 0 0

If you can afford to buy the house for cash, do it.

2007-06-20 00:42:23 · answer #9 · answered by Beau R 7 · 0 0

It makes good financial sense to avoid loans where possible.

2007-06-20 00:40:37 · answer #10 · answered by SGElite 7 · 0 0

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