300k condo and i have the cash, but should I mortgage. I could pay with cash and still have a nest egg of about 100k.
2007-06-26 07:05:54 · 7 answers · asked by ruzgarlimisiniz 1 in Business & Finance ➔ Renting & Real Estate
pay with cash that way you dont pay any interest.
2007-06-26 07:09:29 · answer #1 · answered by G1B 2 · 0⤊ 0⤋
Thats going to depend on you. If having that 100k is enough to get you by, then simply pay for the house in cash and avoid interest. Sure its a tax write off, buy you still will end up giving the bank lots of money over time. Or, if you are person who likes to invest, get the mortgage and then invest alot of the remaining money in mutual . There is good chance you will earn a greater return then you are being charged on your mortgage.
2016-05-21 01:13:42 · answer #2 · answered by ? 3 · 0⤊ 0⤋
It depends what you want to do with the property after you own it. You need to consider the Time Value of Money. What I mean is that if I gave you five dollars for a pack of smokes today and asked you to go buy them for me you could because it would be enough money. But if I gave you the same five dollars today and asked you to hold it for ten years and than buy me a pack of cigs with it you would not be able to because that same five dollars has lost its buying power. That said if you believe the condo to be an asset of yours, (to be an asset you must be making money with it not just own it), and your 300k is worth more now than it will clearly be in the future, you should find a better way to finance the property with a "mortgage" than just dumping all your money into it, and invest the difference. Using all that money right away would be a huge waste! Discuss alternate financing plans with a millionaire. (Dont know one, meet one. Its not that hard and they love talking about money) They will explain how they negotiate financing terms in your market area and probably hook you up with their people. Good Luck!
2007-06-26 07:23:51 · answer #3 · answered by BRad 2 · 0⤊ 0⤋
Well, considering that if you mortgage you will actually pay about 550K or more for the condo because of interest, yes I would buy it outright with cash. Then it's paid for and your income will be your own with no payment to make. If you're in a position to do that, why not save yourself the money in interest.
2007-06-26 07:09:52 · answer #4 · answered by jwsou812 3 · 0⤊ 0⤋
Pay with cash UNLESS you can determine that the investment vehicle in which you will keep your current cash returns substantially more than the rate of interest you will pay on a mortgage.
To those who think that interest write off is so wonderful, always remember that the BEST you can save is about thirty cents on every dollar you pay in interest. Not a wise choice.
2007-06-26 07:17:11 · answer #5 · answered by acermill 7 · 0⤊ 0⤋
But if you pay with all cash, you don't have the interest "write off" at the end of the year. I would pay a portion cash (maybe 100k-150k) and then finance the rest.
2007-06-26 07:13:56 · answer #6 · answered by useurbrain 3 · 0⤊ 0⤋
I you need the write off get a mortgage. If you don't then pay cash.
Acutally, I suggest you meet with a financial planner and have him help you figure out what is best for your individual situation. You may be able to make more money with yourmoney than investing a larger chunck in housing than necessary.
2007-06-26 07:11:23 · answer #7 · answered by Anonymous · 0⤊ 0⤋