In our case, there were considerations other than the possibility of earning higher interest on other investments. We’re quite a lot older than most Bees. Owning your home free and clear as you face old age starts to make more sense. No investment is fail proof. We don’t have time to play catch up if we lost any of our money.
We’re in a very nice, high growth, but LOC community. Property taxes are relatively low; but we are in a very good school district, which is a big plus. All indicators point to continuing growth; but, I have had enough real estate experience to know that can turn on a dime.
So what? All real estate is cyclic. Value becomes important when you want to sell or borrow against the property. While you’re living in the house, value is irrelevant.
The house is also an insurance policy. Since it’s 100% pure equity, it could be tapped later, in old age, if necessary.
I would be remiss if I didn’t mention the psychology of owning free and clear. It’s glorious. This is my second time. The first was my very little cottage to which I escaped from my abuser.
For me, no feeling has ever quite compared to standing out on the deck, or in the front yard, catching myself falling into the old habit of thinking omg, this is so nice. Can I really afford this place? Oh. Wait.
I’d like to say that if you pay cash, no one can ever take your home away from you, but that’s not quite true. You’re still stuck with taxes and insurance. Other things can go wrong that could result in a lien being slapped on your house. That doesn’t usually happen if you are responsible with debt, particularly taxes.
If you do go with cash, be sure to ask your closing attorney about your state’s Homestead Exemption. The limits vary from one state to another. The Homestead Exemption protects your primary residence against future claims by debtors up to a specified dollar amount of equity. In some states, it’s automatic, in others, the Exemption has to be recorded.
You can ask the closing agent to send it down for recording along with the deed.
Just thought I would throw in a bit of a different perspective.
Do let us know what you decide. And there is a mandatory Pic Posting Rule for all Homebuyer Bees, you know. There’s also one for Before and Afters. 😉