pay cash for next home?

**humandraydel** · 05-15-2013, 11:54 AM

Try to use your cash to your advantage with a lower offer but if it doesn't work, you could always get a mortgage. Definitely the cheapest money you'll ever be able to borrow.

**HappySaver** · 05-15-2013, 04:57 PM

Just keep in mind that if you don't take out the mortgage at the time that you are purchasing the home, I'm not sure there's any way to consider it "home acquisition debt" (tax experts can confirm this), meaning you won't be able to deduct the mortgage interest with the IRS.

**leaderscorp** · 05-15-2013, 07:22 PM

Yes, you can indeed use your money to have a lower offer! With your money at hand, I am pretty sure that you can have better options.

**feh** · 05-16-2013, 08:39 AM

I have opinions on this matter, as we bought our last home for cash, but first things first: is there a reason you're buying a house that's double the value of your current residence?

**JoeP** · 05-16-2013, 08:52 AM

Curious: Why are you buying a more expensive house?

**Goldy** · 05-16-2013, 08:56 AM

If it were me I would leave the investments intact and use 50k from the cash account coupled with the equity of the house sale to pay for most of the house. I would then get a small loan of ~150k for the remainder and pay that off quickly with double payments. It leaves your investments intact.

**dedawson04** · 05-16-2013, 09:02 AM

Our first house was our starter home which we have now lived in for 16 years . We are primarily moving for better school district for our kids, to be closer to the city and closure to our vacation home which we frequent a lot especially in summer. I also feel that real estate right now is cheap relatively speaking and buying now vs. waiting another year or two makes sense financially in terms of value.

**JoeP** · 05-16-2013, 09:35 AM

Originally posted by dedawson04 View Post

Our first house was our starter home which we have now lived in for 16 years . We are primarily moving for better school district for our kids, to be closer to the city and closure to our vacation home which we frequent a lot especially in summer. I also feel that real estate right now is cheap relatively speaking and buying now vs. waiting another year or two makes sense financially in terms of value.

Gotcha. We did the same thing for similar reasons, but are now approaching the phase in our lives where we will be simplifying and reducing, hopefully a 30-40% reduction across the board on all expenses.

**EEinNJ** · 05-16-2013, 10:10 AM

You're in great shape financially, and you probably got there by making wise decisions. Congratulations. However, a big decision like this could swing things one way or the other. We need more info to advise you. How many kids, how old, and do you envision paying college tuition? All the news I hear lately is about how expensive that is.
It's nice to have a bigger, more convenient house with a growing family, but that also means more carrying costs. In my state, for example, your taxes could double, from expensive to insane! Is your income stable and high enough to support this?

Assuming you can afford the things I mentioned, even though I encourage debt freedom, in your case a low rate mortgage, with a short (15-20 yr) term for half the house price may make sense. Then you're only borrowing for the "upgrade", and when your kids are at an expensive age you'll have the house paid off.

**dedawson04** · 05-17-2013, 06:18 AM

More info...two kids ages 9 & 7. Each have 529 plans since birth and funding ~ $6k a year in for each so we are saving for college but do not expect to fully fund their college and will expect each to save and cover some of the costs as well. We're likely going to go with a small mortgage given the great interest rate environment which will allow us to not deplete our taxable investment account which has been doing very well in today's market. Thanks for all the input!!

pay cash for next home?