Question:
“I want to buy a home and can afford to pay cash. Do you recommend getting a loan or paying cash?”
Answer:
Congratulations on being able to pay cash for your home! The answer to your question depends on your circumstances and priorities.
Reasons to pay cash include:
- Your offer will be much stronger if you pay cash
- Returns on your investments are less than mortgage rates
- You want to avoid the bother of getting a mortgage
- You like the feeling of owning your home free and clear
Reasons to get a loan are:
- You want to have more liquid funds available for an emergency or opportunity
- Returns on your investments are greater than mortgage rates
- You think rates will rise in the future (at today’s 3-4% rates, that’s a sure thing) and want to lock in today’s low rate
