Should I pay cash for my house or carry a mortgage? I am married no kids - commission salesman - no debt?

Answer 1

Pay cash. The income of commission salesmen varies greatly, and sometimes you receive no income (when you make no sales). It may be hard or impossible to make the mortgage payments when sales and income are down. Paying cash allows you to avoid that problem.

Answer 2

Always pay cash if you can afford to. The only exception I can think of is if paying cash for a home left you with very little money. If paying cash for a home would require you to take out a loan for something else you needed to buy (like a car) then it wouldn't be a good idea. The home loan would be more advantageous than the car loan or personal loan because its tax deductible.

But if paying cash for the house doesn't leave you strapped then I would certainly do it. Just think how much money in interest you will save. And think how much more you can save each month without tying up money in a mortgage payment.

Answer 3

I see everybody says "pay cash".
But think about this: When you've paid cash, you have tied up all your liquidity in real estate. Which is NOT liquid. If you ran into some lean times your cash is all tied up. No money for day to day stuff. That's the down side; the upside is you're not paying interest.
Now if you take out a mortgage you don't have all of your liquid cash tied up, that's the upside, the downside is you're paying interest.
I suggest you look at this from a larger view.
Take your annual income and divide by 52; That should be your monthly house payment. Then look at the cost of the house and have the real estate agent figure out how much down payment you need to make to acheive that house payment. Any moneys left after the down payment can be invested in money markets and mutual funds.

Answer 4

Pay cash. These people that tell you to invest forget one thing. Risk. If you finance your house and something happens where you cant make the payments. The bank will come and take your house. So, Like most of us said, Pay Cash. Then take what would have been your house payment and invest it every month.

A paid for home. Now thats the American dream!

All the tax deduction is is you dont have to pay tax's on the interest you pay the bank. If you dont have a mortgage you wont have interest.

Answer 5

That really depends on your current interest rate and how much you owe and what kind of tax deduction it affords you.
If you have a 5.5% mortgage and get a tax deduction for the interest your real interest rate may only be apprx. 4%.

You could take the money you were going to pay off your mortage with and invest a portion of it and I'm sure you could do much better than 4% return.
I know a few people that paid off their houses with cash and now they're "house rich" but "cash poor".

Answer 6

Put down more than 20%, get a good mortgage, put a bunch in savings (at a higher rate than your loan).

The guy telling people that they "forget about risk" forgets that you still will have your other investments (whatever they are) and you can use them if you need money, and HE is forgetting about risk. If you lose you job, and all of your money is tied up in your house, then you will have nothing to live on. No idea why he posts the same answer everywhere.

But I guess the deciding factor is how smart you are with your money. If you are going to waste it then put it to the house, but just because you currently have it, you are problaby not the type to waste, so put down 20% and have your money grow else where.

Answer 7

Okay here is the opposition. That money invested in your house will earn no return. The house will generally appreciate at 4%. I would put 20% to get rid of mortgage insurance. Next step is to put 1 months salary in CD's that come due each month. 12 different CD's. That way you will have money coming available each month covering nad times. The rest of th emoney should go into modertate to high yielding investment vehicles...or put it into an Tax free investment. You are covered during the bad times and yet put at least half of your money into use earning money for you. Remember that your tax free interest only needs to be greater than 75% of your mortgage interest to make you money..because if the ability to write off the mortgage interest

Answer 8

Pay cash. You don't need a tax write-off. Invest the money that you would be paying on the mortgage in a good mutual fund.

Answer 9

Unless you think you can make more money by holding it in something besides real estate, put it down on the mortgage. Check my profile, maybe you could make more money on this website than what your mortgage charges for interest rate.

Answer 10

are you kidding me, pay cash