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Forum » Misc homeowners: should I buy my first house on full cash?
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Thread: Misc homeowners: should I buy my first house on full cash?

post 1686638853 07-16-2023, 06:52 PM
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Misc homeowners: should I buy my first house on full cash?

I have finally decided to buy a house this year. Should I pay full cash for it or get a mortgage. Why or why not?
post 1686638883 07-16-2023, 06:53 PM
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I’d wait until the 88% crash in 2022
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post 1686639063 07-16-2023, 06:56 PM
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You're going to get miscers say no and to invest it in stocks to make "5-10%" interest on it, but pay a bank 5-7% interest on a house. IMHO if you can afford to not pay a bank a penny for property I would, fukk the banks. (Super Ded fkn Srs)
post 1686639333 07-16-2023, 07:05 PM
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Do you know what the interest rate would be?

I would probably finance it over the longest amortization + lowest rate possible with early repayment provisions, keep the cash and throw it into any number of things that likely provide equal or better returns with minimal risk. If/when rates drop, you can refi the rates right
post 1686639483 07-16-2023, 07:07 PM
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Originally Posted By Destor⏩
Do you know what the interest rate would be?

I would finance it over the longest amortization + lowest rate possible with early repayment provisions m, keep the cash and throw it into any number of things that likely provide equal or better returns with minimal risk. If/when rates drop, you can refi the rates right
All three credit scores are over 800. Zero debt and decently high income. I assume I can get the lowest possible rate. It probably still would be over 6 percent I assume.
post 1686639563 07-16-2023, 07:08 PM
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no lol. wait till bidens jews fuk the economy and have to cut rates. then put min down
post 1686639643 07-16-2023, 07:11 PM
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I would rent for 1 more year, and buy a home at this time next year. By that time, things should be pretty fuking toxic in the housing market and lots of deals can be had, especially if you can pay cash and close quick.
post 1686639723 07-16-2023, 07:13 PM
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Originally Posted By sam212⏩
I have finally decided to buy a house this year. Should I pay full cash for it or get a mortgage. Why or why not?
Absolutely


Miscers who recommend to invest instead of paying a house cash are retarded. They don't take into consideration that the growth on stocks is taxed. So if you get a 10% growth on stocks, the real growth is 8%. There's also a hell of a lot more risk associated


I'd much rather have a guaranteed 6-7% in savings with a much better cash flow than a potential 8%. Once you buy a house cash, your monthly expenses are very low


Renting is retarded because that just goes up permanently
post 1686639773 07-16-2023, 07:14 PM
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If I were buying my primary home today, and have the cash to buy it outright, I would absolutely do that.

It was very different when you could get a 30 year fixed mortgage at 2.5% not long ago to now, where you're looking at a 6.5% mortgage. The amount you would pay in additional interest in staggering when comparing those two scenarios. You also would not be making a lot more return on that cash if you were to invest it in the market given the historic rate of return, and of course there's a very real risk of the market underperforming.
post 1686639793 07-16-2023, 07:15 PM
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Originally Posted By OliverHeldens⏩
I would rent for 1 more year, and buy a home at this time next year. By that time, things should be pretty fuking toxic in the housing market and lots of deals can be had, especially if you can pay cash and close quick.
Bro you've been saying this for years and years. I remember you telling us that the market would crash like 1.5 years ago. Nothing has crashed


Nobody is moving from their 2% loans to get 6-7% so supply will be artificially low for a very long time. You have people with very cheap mortgages. Why would they default? They're not going to. Why would they take low ball offers on their house that they pay 1300 a month on and have huge equity?


Low supply, very low default rate and very stubborn sellers - it will be a sellers market for long time
post 1686639853 07-16-2023, 07:16 PM
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Originally Posted By JayDigital⏩
If I were buying a home today, and have the cash to buy it outright, I would absolutely to that.

It was very different when you could get a 30 year fixed mortgage at 2.5% not long ago to now, where you're looking at a 6.5% mortgage. The amount you would pay in additional interest in staggering when comparing those two scenarios. You also would not be making a lot more return on that cash if you were to invest it in the market given the historic rate of return, and of course there's a very real risk of the market underperforming.
Don't forget taxes. Even if you do a great job and consistently avg 10%, you have to pay 20% in taxes
post 1686640093 07-16-2023, 07:25 PM
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US Treasuries are subject to federal tax but not state/local, so those can be really advantageous if you’re in a high tax state. 3-6-12month treasuries are paying like 5.3% right now, 30 year treasuries are paying almost 4% and your cash isn’t tied up in a property with the shorter duration moves.

Could do a mix, pay down extra but not the entire thing, depends on your risk tolerance and desire to be opportunistic
post 1686640223 07-16-2023, 07:27 PM
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Originally Posted By RollTideBrah⏩
no lol. wait till bidens jews fuk the economy and have to cut rates. then put min down
This srs
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post 1686640313 07-16-2023, 07:30 PM
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I'd just pay for the whole damn thing vs playing arbitrage games.
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post 1686640423 07-16-2023, 07:31 PM
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Originally Posted By ATB161⏩
Bro you've been saying this for years and years. I remember you telling us that the market would crash like 1.5 years ago. Nothing has crashed


Nobody is moving from their 2% loans to get 6-7% so supply will be artificially low for a very long time. You have people with very cheap mortgages. Why would they default? They're not going to. Why would they take low ball offers on their house that they pay 1300 a month on and have huge equity?


Low supply, very low default rate and very stubborn sellers - it will be a sellers market for long time
Mortgage rates are at 7%, and housing is slowing in most of the country already. Rates will likely stay in this area for at least another 9 months.

I'm not saying the entire housing market will crash, but as a person with enough cash to pay for an entire house, you have a weak market by the balls. Anybody who needs to fire sell will obviously take a cash offer.

I'm already having low appraisals coming in on behalf of clients. The housing bust is already here.
post 1686640443 07-16-2023, 07:32 PM
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Originally Posted By FA*******⏩
I'd just pay for the whole damn thing vs playing arbitrage games.
If he sees rates begin to drop, that's the time to buy as we're in a recession.

These rules are pretty clear. Almost no chance housing values rise over the next year based on these fundamentals.
post 1686640473 07-16-2023, 07:33 PM
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Originally Posted By OliverHeldens⏩
I would rent for 1 more year, and buy a home at this time next year. By that time, things should be pretty fuking toxic in the housing market and lots of deals can be had, especially if you can pay cash and close quick.
people like you have been waiting for the crash for almost a decade
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post 1686640503 07-16-2023, 07:34 PM
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Originally Posted By OliverHeldens⏩
If he sees rates begin to drop, that's the time to buy as we're in a recession.

These rules are pretty clear. Almost no chance housing values rise over the next year based on these fundamentals.
low supply keeps prices up

if rates go down, prices go up
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post 1686640563 07-16-2023, 07:36 PM
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Originally Posted By FA*******⏩
I'd just pay for the whole damn thing vs playing arbitrage games.
30yr treasury and 30yr mortgage would be full arbitrage mode, but I would really be doing something shorter duration that would also free up the cash and give the freedom to do something more actively with it…. Like averaging into a market drop or something.

No need to be ultra conservative IMO in OP’s position but that’s entirely an individual thing
post 1686640903 07-16-2023, 07:46 PM
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With where rates are right now you could honestly flip a coin as to whether it's better financially to pay it all now or go for a mortgage and invest it. Not worth losing sleep over. Just go with whichever you feel more comfortable with and don't think about it.
post 1686640943 07-16-2023, 07:47 PM
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Originally Posted By ~Hades~⏩
low supply keeps prices up

if rates go down, prices go up
Rates were very low in 2012. So were prices.

If people don't have money for a down payment, they don't buy houses.
post 1686641153 07-16-2023, 07:52 PM
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For someone in your situation OP, I would just buy it cash. Whats your budget and what size house?
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post 1686641443 07-16-2023, 07:58 PM
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Originally Posted By OliverHeldens⏩
Mortgage rates are at 7%, and housing is slowing in most of the country already. Rates will likely stay in this area for at least another 9 months.

I'm not saying the entire housing market will crash, but as a person with enough cash to pay for an entire house, you have a weak market by the balls. Anybody who needs to fire sell will obviously take a cash offer.

I'm already having low appraisals coming in on behalf of clients. The housing bust is already here.
Everyone thought market would crash when government raised rates. Prices went down for a few months and then shot up again
post 1686641533 07-16-2023, 08:00 PM
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Originally Posted By FA*******⏩
I'd just pay for the whole damn thing vs playing arbitrage games.
People kill me with this mortgage vs stocks debate because nobody ever considers taxes or risk or cash flow


Your 10% growth in stock market is really 8%. That's not much better than interest you pay on a house. Also your cash flow when you have a paid off house is awesome. You can invest tons at that point
post 1686641613 07-16-2023, 08:01 PM
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Originally Posted By ATB161⏩
Everyone thought market would crash when government raised rates. Prices went down for a few months and then shot up again
Clearly it will take longer in some areas than others, but eventually 7% interest rates will decrease values in all markets. There's literally no way overall values increase with rates at 7% going forward.

The only market that might not see any impact is The Villages in Florida.
post 1686641793 07-16-2023, 08:05 PM
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Originally Posted By OliverHeldens⏩
Clearly it will take longer in some areas than others, but eventually 7% interest rates will decrease values in all markets. There's literally no way overall values increase with rates at 7% going forward.

The only market that might not see any impact is The Villages in Florida.
You may see some up and down fluctuations in real market but there's no guarantee it will go down. There's just as much likelihood it will go up... same way it went up after initial drop when they raised the rates


The supply of houses is still very low. You need the supply and demand charts to be flipped for prices to go way down


Most people are also in very favorable mortgage situations so sellers are more stubborn than ever. If you don't get your asking price, you just don't sell. Why rush to sell on a house u have a 1200 mortgage with 300k equity when a comparable house or rental elsewhere will be 2500 a month?
post 1686641913 07-16-2023, 08:07 PM
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I've thought about doing this. I think by 40 I will have about $400k, and with gf maybe $600-700k cash.

Why not buy the house outright, and just live a stress free life in my career?
post 1686641993 07-16-2023, 08:08 PM
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Originally Posted By Crazy_Desi⏩
I've thought about doing this. I think by 40 I will have about $400k, and with gf maybe $600-700k cash.

Why not buy the house outright, and just live a stress free life in my career?
Absolutely


Buying a house cash is the smartest thing you can do unless you have a 2% mortgage (which will never come back)
post 1686642313 07-16-2023, 08:16 PM
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Originally Posted By ATB161⏩
People kill me with this mortgage vs stocks debate because nobody ever considers taxes or risk or cash flow


Your 10% growth in stock market is really 8%. That's not much better than interest you pay on a house. Also your cash flow when you have a paid off house is awesome. You can invest tons at that point
Because the discussion on this board is rarely scientific enough. It's much better over at Bogleheads.

Here large, sweeping comments are made about entire countries without a care for the basic principle in property investments: location, location, location.

It's how you can separate the LARPers from the actual property investors, btw. Rather easily.
post 1686643313 07-16-2023, 08:42 PM
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Originally Posted By Godfrd824⏩
For someone in your situation OP, I would just buy it cash. Whats your budget and what size house?
Budget is between 700k-1.2mil. Looking at couple of areas. Probably around 3000 sqft
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