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If you had the ability to purchase house with cash, what mortgage rate would it take to do so? 7%, 8%, 10%? Historical stock market returns are only in 10% range, when avaeraged over a very long time period, with bond returns being less.
If you had the ability to purchase house with cash, what mortgage rate would it take to do so? 7%, 8%, 10%? Historical stock market returns are only in 10% range, when avaeraged over a very long time period, with bond returns being less.
An interesting question. I think you're more likely to generate the discussion you are looking for if you post in the Investing forum. Here in mortgages, the discussions are more about monthly payments, credit scores and how they affect affordability and approval, not about the strategy of cash or mortgage for purposes of return.
You borrow if you need leverage to accomplish your goals, or wish to use leverage as a tool for other reasons. The interest rate is less compelling, since it does not operate in a vacuum.
If one has the ready cash, additional reserves, good personal cash flow, fully funded retirement portfolio and the continuing ability to continue to fund it, buying with cash may make great sense regardless of interest rates.
There are SO MANY other variables involved so there is no clear answer. You don't necessary have to put the cash in stock market. You need to look at each situation separately. I personally carry a mortgage on my home because at 4.5%, it's a no brainer since it allows me to use all the cash to do other real estate investing.
There are SO MANY other variables involved so there is no clear answer. You don't necessary have to put the cash in stock market. You need to look at each situation separately. I personally carry a mortgage on my home because at 4.5%, it's a no brainer since it allows me to use all the cash to do other real estate investing.
Exactly!
And that is why Baskin Robbins has 31 flavors. Something for everyone.
Personally, I would not leverage my home for capital for other investments, unless it was to invest in an organ transplant.
I would want real estate investments to tote their own notes and still provide cash flow.
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