Is that an option for you? Nice.

For most of us, we put down 5, 10 or 20 percent when we buy a home, and finance the rest with a mortgage loan.

What if you had the money, in cash, to buy?

Question: I am currently 21 years old and shortly will be leaving college. My question is somewhat unusual — should I purchase a house in full if I have enough cash to do so? Or should I finance the house, placing a minimal down payment and investing the rest of my money elsewhere to cover the cost of my loan?

– Ryan J. Seay, San Jose, Cali

Well, it seems logical that you would pay all cash, then, right?

Maybe. However, if a mortgage loan is costing you 6%, yet investments are offering you an 8% return, a case could be made for financing at least some of your home purchase.

Plus, having all your equity tied up in your home is not a good thing, necessarily, since it’s hard to get money out, right away.

Of course, if you have $500,000 laying around, I’m going to guess you have money just pouring out of your pockets, no matter what.

Complete article: A Young Buyer Asks: Should I Purchase My House Outright? – By June Fletcher, The Real Estate Journal

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Updated: January 2018

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