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Old 10-29-2007, 07:42 PM
 
2,197 posts, read 7,378,561 times
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Quote:
Originally Posted by escapetacoma View Post
I agree with your financial people - to a point. IF you are disciplined enough to invest every cent of what you would have paid extra on your mortgage you should end up with more money in the end by carrying a mortgage. That's a mighty big IF, though, for most people.

It also fails to take in to account that we're really not trying to build up money, we're trying to build up wealth. In the abstract wealth is a tenuous concept but one way to think of it is as the things that are important to you. For some of us the sense of wellbeing that we get from being debt free adds to our "wealth" more than the marginal difference between what we'd have if we diligently invested every cent that we would have paid extra against our mortgage and continued to pay out for the life of the loan.

We're learning discipline in investing but mostly we're much more relaxed and much happier being debt-free than we would be with a mortgage over our heads. I say bully for those of you who look at it differently but don't forget that there are those of us out there who understand why it can give more money but still choose not to do it that way (with the advice and full consent of our financial advisor, no less.)

I want to maximize my overall financial position, period. If I can leverage my money and invest at a greater return than my mortgage rate, that's the best use of capital for my situation. I can get CDs with a rate higher than my loan rate, but I stretch the differential even further in the stock market. With an effective mortgage rate near 4% (with tax advantages) and a disciplined approach to investing, there really isn't any reason to pay it off. I do have a 15-year loan, however, so I won't be carrying debt in retirement. Just seems to make the best sense for me. Other situations may be different.
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Old 10-29-2007, 08:09 PM
 
31,672 posts, read 40,949,633 times
Reputation: 14419
Default Isn't that how we got here

Quote:
Originally Posted by barbijone View Post
I am a realtor and you would be supremely surprised to know how many people have all CASH to buy homes these days. Even very expensive ones, those people are just waiting to pounce soon on many of the good deals out there, beat 'em to it and make YOUR million!!!! It would serve them right. Besides, why would anyone do that? You could parlay the 100% cash payment to 5 homes with 20% down and rent the other 4 out until you can cash out and make another mint!
Folks are buying one house and paying cash so they have a secure retirement without contributing to the bubble and putting that security at risk so a realtor can make five commissions.
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Old 10-30-2007, 09:09 AM
 
31,672 posts, read 40,949,633 times
Reputation: 14419
Default Help me to understand

Quote:
Originally Posted by home*sweet*home View Post
We own five houses. We leveraged the equity in the first a few years ago to cash some out (not ALL!!) and bought the first investment, a duplex. That is rented and totally pays for itself, with a tiny buffer. Then we bought the second, also a duplex and though that one actually costs us a tiny bit (we pay utilities) it is waterfront and has appreciated well above what we paid for it, even in this down market.

We then bought a quadplex - and that one provides about $1200 per month over the morgage, which more than pays for the second home's tiny deficit.

Finally we bought our 'retirement' home which is a duplex with four tiny studios on the property as well. That one is also paid for by the rent of the units, AND provides a vacation home for us as well.

If we had paid cash, we'd have one home.
I know and understand you are purchasing and paying for multiple homes. How many homes do you actually own? Not in the process of paying for but actually own. Certainly if it is one or more then you are on equal footing with the person who pays cash for one.
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Old 11-01-2007, 12:15 PM
 
4,948 posts, read 18,657,285 times
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Quote:
Originally Posted by jak88 View Post
Has anyone saved up enough money here to buy a house off, with no bank loans and no interest? Like say you saved up hard enough for twenty years and have 1 mil, and decide to put 200,000 on a house the day you buy it, having no rent payments every month and only having to worry about other housing related bills like water, gas, etc. Anyone ever do this, and if not, do you plan on doing this, and is it even possible nowadays?
noway, when I did buy, I was in a force situation. The intrest rate was under 5 per cent. If I could make the same, and keep a bank account, I could not see why to use the extra money for a roof over my head. I also like
the idea, I could draw extra money from the bank, since I always pay, and have excellent credit. Yes to be free of payments is heaven. I just have peace of mind knowing the bank as some money, not Mr. House. I donot think there is a right or wrong answer.
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Old 07-01-2018, 04:47 PM
 
Location: Northern panhandle WV
3,007 posts, read 3,118,385 times
Reputation: 6796
Bought a house to retire to brick 5 bedrooms 3 bath, 36K.
Don't forget one of those things you still need to pay on a house is Property taxes and depending on where you live that can be a LOT.
In my case taxes are less than 200 a year, but insurance is almost 2000 a year because they insist on covering it on replacement cost of 450K even though I could buy the whole street of homes here for that much.
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Old 07-02-2018, 12:11 PM
 
Location: North Idaho
32,548 posts, read 47,673,829 times
Reputation: 78008
Four out of five houses that I just sold were purchased with 100% cash.

Then I took that money and bought 4 houses, all cash.

So, yeah, lots of people buy without a mortgage.
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Old 07-02-2018, 01:53 PM
 
Location: New Orleans, LA
1,843 posts, read 3,927,575 times
Reputation: 3366
Quote:
Originally Posted by oregonwoodsmoke View Post
Four out of five houses that I just sold were purchased with 100% cash.

Then I took that money and bought 4 houses, all cash.

So, yeah, lots of people buy without a mortgage.
Yep. Been there, done that.

That said, although I could have written a check for the full amount for my present home on the day of my offer, it took 52 days until closing happened. I needed to have a home inspection, and the sellers needed to complete some repairs that turned out to be more extensive than any of us expected. Closing was first scheduled for two weeks after my offer, but because of the repair difficulties the sellers delayed closing 5 times. Then they also needed to move out.

Anyway, these things take time.
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Old 07-02-2018, 02:07 PM
 
Location: Grosse Ile Michigan
30,707 posts, read 79,533,896 times
Reputation: 39444
Yes.

It was $1.

I also bought the land for it to go on in an instantaneous all cash deal.

It was mating the two and restoring the house that required loan.
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Old 07-06-2018, 05:09 AM
 
Location: Henderson, NV
7,087 posts, read 8,605,438 times
Reputation: 9978
Quote:
Originally Posted by jak88 View Post
Has anyone saved up enough money here to buy a house off, with no bank loans and no interest? Like say you saved up hard enough for twenty years and have 1 mil, and decide to put 200,000 on a house the day you buy it, having no rent payments every month and only having to worry about other housing related bills like water, gas, etc. Anyone ever do this, and if not, do you plan on doing this, and is it even possible nowadays?
Yup, every place besides my first condo I bought with cash, but after the fact I put mortgages on the last two (the first two condos were cheap, there was no point to a mortgage on homes under $200K for me) for 1/3 the value of the home and this one about 1/4. It just made the transaction way easier to buy both of them with cash because you beat out the regular bidders trying to borrow money, so you're more likely to save on the cost of purchase and get the deal done fast. You can close in 2-3 weeks with cash.

One builder's communities I'm looking into sells in the $1.5M to $2M range and they told me half of their buyers are cash buyers. Good for them, but yeah, that won't be me. Definitely that would make things easier though, but yikes.

I think that some people (I throw myself in this camp) have a psychological desire to own their home free and clear even when it doesn't make logical sense. For me, I would like to pay off the next house within maybe 5 to 8 years if I could, though at the same time if the bank is going to give me $800K at 4.5% interest or whatever, it's hard to say no to such cheap money when I can make at least 7% on my money with other investments. It's not really logical to pay all cash even if I could do so, because my money would be better spent working for me. Still, there is that psychological thing where it's just somehow nice not to have monthly payments on a house, even if it doesn't totally make sense. Even my accountant said he owns his home free and clear, we both kind of laughed about it because he knows it's not on paper a fully sound decision, but there's something appealing about lower costs per month.
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Old 07-06-2018, 06:13 AM
 
24,530 posts, read 18,089,246 times
Reputation: 40216
I could have but I have enough job instability issues that I'm not willing to go without an emergency fund that can keep me going for several years. I've purchased two houses in my life with 60% down and zeroed out the mortgage quickly.
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