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You could but with rates <3% the cost of borrowing is at a historic low. You would be much better off investing
We had to pay cash for our house to make a competitive offer and never refinanced to a mortgage. I know it’s money left on the table but the peace of mind has been amazing.
Jist a point to consider: my mortgage rate is 1.875% right now. If you get approved, it does not get cheaper. Also, if you have that money invested n rhe market, you could still at some point pay of the house if you really wanted to. Don’t really see the mortgage downside.
If you can do it, go for it as long as you aren’t sacrificing saving up for retirement. Ideally, a mortgage allows you to do both without owing more as inflation increases. With rates at an all time low, it’s kind of crazy not to think about getting a mortgage. Also, if you have a large amount already saved, put 20% down and always always do the 30 year fixed rate loan. You never know what happens. I like Graham Stephen who explains why: https://youtu.be/BJ3xhjqk52A
Lastly you’re missing out on tax deductions.
Why do you not want to take out a mortgage?
Rising Star
An all cash offer would give you a big advantage in a bidding situation.
All points above are true related to interest deductions and market rates being low.
If you have the money to buy in cash, then do it. If you are saving up while renting then this doesn’t make sense. You can always take out a 30 year, pay more in down payment and additional principal payments, then pay your mortgage off early.
I’m going to see where things are in Q1-Q2 between my returns on my money market index fund versus my interest payments. If the interest is higher than my return, I may just pay my mortgage off 6 months into a 30 year.
I also buy rental real estate so its just worth not having headaches and additional hoops to jump through if I have $0 liabilities.
Also, fixed rate debt gets significantly cheaper if inflation gets high. Doesn’t look likely soon, but the macro economy looks set up for possible inflation at some point. Just one more reason to like a mortgage; it’s an inflation hedge.
There is no straight cut answer.
You will have to run your numbers. With mortgage loan rates at historic lows, some might think that it is a no brainer to take out a mortgage. The Google sheet that I've given the URL to below does point it that way, but not by a whole lot.
You'll have to consider two scenarios.
1. You take out a mortgage. Consider the return of the mortgaged amount invested over 30 years, subtract the total interest you'll pay on the mortgage.
2. You don't take you a mortgage, pay cash. You then invest your would be mortgage payment from #1 each month. Check return after 30 years.
https://docs.google.com/spreadsheets/d/1lm9XPFx2VlYb30eAY-px3SW5mIzpVVIjRhaDpjDeQag/edit?usp=sharing