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When should you pay cash for the house?

By
Real Estate Broker/Owner with Rosemont Financial Inc

 

So I was sitting at a listing presentation with an older couple.  I was the second Realtor that they had met with, and the first agent  had given them a lot of advice.  My clients are moving from Ca to Texas, they will have about 300k from selling there home, and plan on buy a home for about 150k.  My clients live on social security and pension, and have no other source of income.  The other agent told my clients to put as little as possible down on the next house, and the rest in the bank. 

 

So my clients ask if I think they should by this house free and clear or not.  I asked if they needed a tax break, the said no.  I asked if they wanted to a mortgage they said no, then I asked what would the do with the money if they did not buy a house with it; they told me they would put it in the safety deposit box.  So I told them to buy the house, with all cash.

 

I sit here wondering why the other agent would tell them otherwise….What do you think was the right answer.

 

 

No Longer Active
Real Estate - Fallon, MT
Beth... The payment of cash is the way to go especially since their money will only be collecting dust in a safe deposit box.   Even in a secure investment I don't think the interest received on the money would justify the hassle of paying a mortgage every month but that is just my opinion, suppose a financial planner could run the numbers for them.
Jul 12, 2007 08:48 PM