michael g
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Oh yeah - you need the tax shelter.
Use and grow the $$$$.
The intrest rate on the mortgage is your return on the $$$.
Invest the money and hopefully thru smart desicions you can have a higher rate of return.
OK - I have 400,000 and get a mortgage for 100,000 house that leaves 300,000 in the bank - savings /C.D @ say 5 % intrest Thats 300,000 earning 5%.
OK - My mortagage at the end of the year I can write off the intrest @ say 5% PLUS I still get the appreciation of the house thru the years.....................
No mortagage - cash sale - I lose the deduction at the end of the years ( intrest 5 % ) and I have less in my savings / CD @5% intrest and my only gain is the appreciation thru the years of the house.
Get a mortagage , write of intrest , lower your tax bracket and have more money to invest or accure intrest in the bank.
Smart investing will also give you a higher rate of return than a mortagage at say 5%. So having more money to invest means it will grow quicker.
If you people dont know the answer to financial matters - THAN DONT ANSWER - You cost people real money if they listen to your advice
Go answer in the polls and surveys so people dont lose money and live paycheck to paycheck like you do.........
My oil stocks are currently returning 18% I dont complain at the high gas prices I make lemonade...........
Corn is next.
Bought Delta @ 70 cents while people were selling before they filed bankrupcy................Now its sitting somewhere at 8 dollars a share.................Nice return !!!! |
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Angie :-)
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I would just pay cash |
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DFLy
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no way pay with cash!
unless you can find a saving scheme which gives you more interest than the interest on a house loan |
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David W
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if you don't need the credit rating, pay cash, the tax benifits are only on the interest, really not the same as paying cash, won't save you any money, will cost you more in the long run, |
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Joseph C
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No!
Pay cash, despite what the fact that you could crunch the numbers to say otherwise.
I owned a house I paid cash for once, before I screwed my life up. |
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tidworthsucks
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you are lucky most people would love to have that amount of cash. In this day and age id pay cash as my old mum would say there is money in bricks and mortar sod the mortgage be debt free |
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titoalbanaples
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Use cash, no advantage to a mortgage. The tax benefits don't justify the mortgage either. You can do the math yourself. You pay 5% or greater interest and get to deduct the interest from your gross income. Whatever money you keep in the bank by not paying full cash for the home you will get at best 3-4% from the bank(as of now) and have to pay income tax on that 3-4%. No matter what tax bracket you are in you will pay more with a mortgage. Not to mention costs/fees associated and to me most importantly the pleasant feeling that you and you only own your home. |
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theater kid
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nooo |
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cameronisbored
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Pay cash if at all possible. You save A LOT of time and money doing that. |
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canes77
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Talk to an accountant or financial advisor. They will know all the ins and outs of the potential savings from tax deductions you will receive. There are some tax benefits from deducting the interest, but I'm not sure that the costs don't outweigh the benefits if there is a choice. |
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lacyd4u
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Lord no pay the cash and forgo the mortgage. |
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Robert
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There are tax benefits, namely deducting the interest. If you will benefit more from deducting the interest from your taxes than from just buying the house, you might consider a mortgage.
I attached a link that tells you more about tax benefits.
Also, another thing to consider, is if you pay off a mortgage in good standing, your credit will shine, and if you need a car loan or something in the future, when you can't pay cash, you'll get a better deal. |
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4 X
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While everyone has given very good ideas and information there is one post that hits on good financial strategy in my book. (if I had ever written a book it would be in there...)
The interest rate for mortgages is low right now and you could get a rate of 5.5-6%. The idea is to put your money to work in an investment vehicle that is earning more than 6% then you have a net gain on the money.
You pay 6%, write off the interest on your taxes and if you make 8% on the investment you have a net gain of a couple percent. This may make the money grow faster. This way you have the appreciating asset of a house, plus the couple of interest points.
I would buy a house with 20% down ($50,000 down payment, plus about $18,000 closing cost), invest the remainder of the house purchase price 182,000 (or all the remainder of the money) in something pretty conservative but over the 6% mark in order to make money.
I am not conservative at all, I trade currencies, so I couldn't make this plan work but if I were in your position I would do just this.
You will make the right decision. |
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DCK2003
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Pay it off, the tax benefits are minimal and only really good for the first ten years of the loan. Speak with a CPA for specifics. Just pay the home off. Rarely does the interest paid equal the tax benefit received.
If you do decide to buy the home outright get a home inspection, speak with a real estate lawyer, have the lawyer handle the closing, and buy title insurance. You need to do this to protect your investment. |
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JM
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it's really up to you! it could really benefit your credit if you take out a mortgage and pay it and you can claim the interest paid on your mortgage on your taxes. but there's definitely something to be said about owing a home mortgage free. |
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Ross
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The interest you will pay will be more than any tax break. If you were an aggressive investor, entrepreneur, risk taker than there would be better things to do with that cash, but if you are asking the question than that is not who you are.
The fact that you put your email address in your question makes me suspicious, why do you want people to contact you aside from here? |
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golferwhoworks
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pay cash are kidding me. The only thing about a mortgage is the interest PAID is a tax preferences item. Pay cash and take what you would have been paying to a mortgage and invest it every month. Now I say this not knowing where you currently have this money. If it is in a retirement fund you will be taxed on early withdrawal and as regular income and it will amount to a 50% tax on the $$, if there then get a mortgage. If not pay cash |
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Nathan G
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I don't think you really care, you just asked the question so everyone would know how much money you have, if you're really even telling the truth. And if you are going to spend $250,000 why wouldn't you get a nice house with a big yard. Spending that much money on a town house is stupid. |
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Free Speaker
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I would say get a mortgage, and then talk to a financial advisor on how to grow the 400k,
if the money is tied up in a mutual fund it is not taxiable, until you take it out.
Put down a healthy down payment
Both of these will help grow your credit score, just incase you ever need a good one. |
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dialtechd
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If you can pay cash - Why wouldnt you? The only reason people take out mortgages is cause they dont have all the money at once.. Also why pay interest, whatever you get back in takes you are paying in interest. Do yourself a favor and buy outright |
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