Have cash for home purchase. Why are people telling me to get a loan?

Question

I can pay for a house in cash and still have cash left for 50% of the homes value.  People are telling me to get a loan because rates are low.  But closing costs would be several thousand dollars.  The tax writeoff for interest doesn't make sense... why pay $10,000 in interest to save $3000 in taxes?
I might be able to earn a return greater than the mortgage rate, but that varies wildly and I will still have more cash to invest at higher returns.  What am I missing?

MadMan · Accepted Answer

The ONLY advantage of taking out a loan is if you could get a better return on the cash somewhere else.

? · Answer

Having a home mortgage and paying it on time each month will help your credit history as well as credit score.  

At times people who pay cash for most if not all items do not have much credit history and might be denied credit if they applied.

In your text above, you failed to mention the deduction for property taxes.  Depending on where you live you might have 4,000 + additional dollars to claim as a deduction.

If you invest in stocks or mutual funds, use the online research tools to find investments  that pay dividend yields greater than your rate of mortgage interest.  By doing this you will basically be paying your mortgage and still retain your original value invested.

Best wishes to you.

Anonymous · Answer

You will have closing costs in either case.  What you will not pay (if you go the cash route) are the loan fees.  Make your own decision based on your finances - not what "people" say.

Anonymous · Answer

You possibly can instanly obtain an advance payday loan as much as $1000 by using site: http://loans.servermatrix.org I obtained my payday loan even though I had extremely negative credit rating.

Ric · Answer

Nothing... There is no benefit taking out a loan if you can pay in cash.

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Have cash for home purchase. Why are people telling me to get a loan?

5 Answers