$90.000.00 at 6.25% fixed rate for 30 years (not including taxes, fees, etc.)
I went to an online mortgage calculator and keep coming up with over 100K savings! Is this correct?
I do have the cash and signed the papers. People think I am nuts for paying cash, but I look at them thinking who is the real nut.
I am not worried about write-offs or investing the money. I have to live somewhere instead of an apartment. Most importantly, I want my kids (while they are young) have a place to call home, friends and memories.
If needed, I can get a mortgage and buy another house and rent it as apartments and break even for the next 30 year.
You’re going to save about $110,000 over the course of the loan. Just make sure you look at other options before you take 90K out of your pocket, in case there’s a better opportunity somewhere.
It’s probably more than that. Do you really have $90,000 in cash to pay for a home? If you do – that’s the way to go – don’t listen to anybody who tells you that you should have a mortgage for a tax deduction – the money you save will be triple your tax savings – especially at the end of your mortgage where you are paying less interest and more principal.
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It’s more than that. How much total would you spend in 30 years of payments? That’s how much you’d save.
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If you financed a home for $100,000 , for example, you would end up paying close to $300,000 for it in 30 years. The true cost of the property is roughly 3 times it’s selling price when you finance it.
Great for you! Pay cash when you can.
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You won’t get the tax write-off benefits. You will save but, I prefer to have my money work for me and would put that 90k somewhere else making more than 6.25%.
Maybe buy, another property with a mortgage, rent it out so someone else is paying the mortgage.
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It depends on your philosophy – If you feel better about paying off your house, it should/will impact your financial outcome in business. The same thing should happen if you take out a mortgage.Technically, you should look at your age.
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Paying cash is usually not only Nuts…it’s stupid.
If instead of paying cash, you had taken that money and invested it you would have most likely done better than 6.25%.
Hell, CD’s are paying between 5 and 6% right now. If you use a ladder strategy you could probably break the 6.25% mark on CD’s alone. Add in the income tax advantages and its usually a no-brainer to finance.
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You’re going to save about $110,000 over the course of the loan. Just make sure you look at other options before you take 90K out of your pocket, in case there’s a better opportunity somewhere.
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5 years real estate and mortgage experience
You need to understand the time value of money. Do you know what $90000 could do for you over the next 30 years as an investment? I guarantee it will be more than the appreciaton of your property. By having a 90000 mortgage at 6.5% and making even an average 10% return on your investment you are still way ahead to take the mortgage out and invest the money. Google "Time Value of Money" . Compound interest is a beautiful thing. Good luck.
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Mortgage broker serving Wisconsin, Minnesota, and Florida.