Originally Posted by Henry17
That pretty much has to be close to the worst thing you can do when buying a house. The only way this possibly make sense would be if a degen had a windfall and was looking to lock up funds in a way that he couldn't blow through them easily.
This is the type of crazy talk where sane and smart people make idiot proclamations. I guess Warren Buffett was wrong to pay cash for his house 50 years ago. After all, he knew he could beat the markets.
As a general rule, paying cash is always the best option for buying anything in the world. After all, if you aren't paying cash, then someone is lending you the money, and they are going to make a profit on that money.
The only scenario where borrowing money makes sense is if you can walk away without the penalty being significant. For example, if you you can somehow borrow a few million to invest, and if you blow the money, all you get is bad credit, or have your company file bankruptcy, then you might as well risk other people's money. Businesses do this all of the time, with the individuals being responsible not being personally liable.
People have no concept of the bad things that can happen in life. Having a roof over your head that is fully paid for (aside from taxes), means that you and your family will weather any economic storm that comes.
There is just so much garbage advice out there. People with calculators running around talking about all of the advantages of going into debt. These fools even suggested keeping mortgages when rates were 6 and 7 percent. Such terrible advice to tell someone to give up a guaranteed rate of return of 6 or 7 percent, while securing their family. The argument was that stocks go up 9 percent long term...lol. Joke advice.
Think of it like this. Imagine that you had an apartment building that you could live in for the rest of your life. You love the apartment, and it will be there forever, so you can stay forever. But you could sell the lease to someone else if you wanted.
Now, you can make one payment to the landlord now and never pay another dollar in rent, or you can pay monthly payments for the rest of your life, which will be the equivalent to a mortgage with interest.
If you can lock up a roof over your head it is good advice. Buffett must be a moron. Maybe he should go out and get a mortgage on his house and invest the proceeds...lol?
People make way too many assumptions about future financial returns, and people mostly disregard the advantages of not having debt. Bad things happen when you have debt. And when really bad things happen to your individual circumstances, you do not want to be owing a lot of money.
99 percent of the world's economic problems right now are directly related to horse**** money assumptions and too much debt. And all financial problems can be solved with one thing. And that one thing is CASH. It can solve every single financial problem that ever existed, and yet people thumb their noses at it and agree to give it away to lenders for things that don't make sense.
In the old days, people actually used to work and have discipline, so that they could save the 20 percent down payment for a house. This often took them years, and many people worked real blue collar jobs in order to do that. Once that mindset changed, the whole game changed forever. Nobody sacrifices anything now.
So, basically, the public got what it deserved with the housing mess. If you are going to buy, the time to buy is after the bubble collapses, which is now, but if you have tons of cash sitting around, and you decide to take out a mortgage, then you are just a sucker to the system.
I would rather rent in all cases. Freedom of movement. And yo avoid all of the time consuming maintenance that cannot possibly be the way that people really want to live their lives. Do people really daydream bout calling the plumber, mowing lawns, and all of the other time wasting things that come with owning a home?
I don't think so.