This is quite a difficult question to answer believe it or not because in reality everyone’s financial situation is different and what works best for one may not work best for others. You see my Grandfather who I spoke about in the introduction taught his family members that debt was okay and that mortgages were a necessary part of living. What I have learned through the education he demanded I get is that this wasn’t exactly true.
You can buy a house without a mortgage and most financial professionals that have your best interests in mind would recommend you do. I personally lean towards no mortgage as well because the benefits significantly outweigh the negatives. Paying cash for a house has many benefits:
- Significantly less monthly debt.
- Pay “Zero” Interest
- Lower your monthly expenses greatly
- No Closing Costs
- No Loan Origination Fees
- Increased Financial Security
- Less of a Financial Burden
- No Appraisal Fees
- Cash is King – Beat the Bidding War Game
Paying cash also has some negatives that you should be aware of and you have to really measure the trade off’s and the opportunity costs of this decision.
- Loss of Liquid Assets
- Less Money to Invest Initially
- Loss of Tax Write-Off for House since it is based on Interest Paid.
Some would argue that #3 is the best reason to get a mortgage but let’s look at it just a little closer.