a house cost 250,000 and you have 250,000 would you pay off the house of place the money on a Cd', account?

Answer 1

It depends on a couple of things.

First, what interest rate will you pay on the loan,

Second, assuming the loan is tax deductible, what is your marginal tax rate,

and third, what is the interest rate to be received on the CD?

If you borrow at 6%, and are paying taxes at a marginal rate of 25%, that means you're really only paying 4.5% for the loan, assuming the interest is deductible.

If the CD rate is higher than that, then borrow and put it in the CD.

Of course, if you are in a high-risk profession such as medicine, you might want to put the money into the house, as it is probably exempted from any judgement for liability by the Homestead exemption.

You also don't want to fully deplete your emergency cash reserves.

Answer 2

Put down 20% that should save you from the extra cost of having to pay the PMI insurance.Then invest the rest of the money in money markets and a mutual fund that way you will have an easy way to get to your money for the payments. The interest on the mortage will be a tax deduction.

Answer 3

Put less on the house and more in investment. The money you put in the house is tied up and harder to use for other needs or opportunities. It is not "liquid".
Also, with a mortgage, over time you are paying back less valuable dollars to the mortgage company because of inflation.
And, if the investment pays more than the mortgage rate, it's a no-brainer.

Answer 4

Never pay off anything right off. If you do that, it will show a good credit score, but it will also show that you do not have enough credit if you decide to finance something else. Always keep something with a line of credit active. Maybe pay off half of the house and keep the rest in case of emergency.

Answer 5

you only need 20% down on the property. or 50k.

Answer 6

It depends on what your investment goals are.