Curious

Supergrass
Supergrass

Let's say a house I'm looking into buying is 170,000 how much should I save in theory by buying in full with cash?

Stark_Naked
Stark_Naked

@Supergrass
Depends on the interest rate and length of the mortgage obviously, retard

Need_TLC
Need_TLC

@Stark_Naked
There wouldn't be any mortgage or interest rate with cash in full, retard.

Sir_Gallonhead
Sir_Gallonhead

@Need_TLC
What is the point of this question?

If you can save that much in a reasonable time, then surely your income is enough to handle operating expenses.

King_Martha
King_Martha

@Supergrass
You should save 170k + additional expenses to buy a house that costs 170k + additional expenses, what sort of retarded question is this

Spamalot
Spamalot

@Supergrass
how much money should I save up to buy this $100 widget?

girlDog
girlDog

@Need_TLC
Fuck your stupid. It depends on the interest rate and length of the mortgage, and also on the expected rate of return you could earn on that money if you invested it instead of spending it. You also need to know the expected appreciation of the house.

For most cases, given current interest rates, you would LOSE money by paying in cash. Dumbass,

farquit
farquit

@Supergrass
$0

The person selling the house gets paid the same whether the sale is financed or not.

TurtleCat
TurtleCat

@girlDog
it could cost an extra 80,000 in interest how do you not see that?

RumChicken
RumChicken

When someone has the $$$ in cash and full you can 99% of the time pay less because it saves everyone time and cash, also the seller doesn't have to worry about the loan backfiring. What I'm asking is how much do you think I could knock off?

DeathDog
DeathDog

@Supergrass
Why would you buy a house in cash? Mortgages are like 3% interest rate. Take the money you would have put into the house and invest it. Beating 3% apr is easy.

BinaryMan
BinaryMan

@RumChicken
Its not that much less. There really is not much difference from a cash buyer and someone who mortgages. Either way the seller gets the full amount except with the mortgage they get the money from the bank. The only reason sellers even prefer cash buyers is that they save on some amount of closing costs. Cash buyers are just as likely to pull out mid-sale as mortgagers are.

FastChef
FastChef

@DeathDog
Because I have enough to own it right now, and interest rates would have me end up paying more. With cash I can also close the deal faster and cheaper.

PurpleCharger
PurpleCharger

@RumChicken
Why would the seller care if you defaulted? That is the bank's problem.

StrangeWizard
StrangeWizard

@FastChef
If you offer me 170k cash and another guy gives me 190k financed guess who im selling to.

Stupidasole
Stupidasole

@BinaryMan
They also save on time. Sometimes you'll get offers contingent on the sale of the buyer's previous home.

Nojokur
Nojokur

@Supergrass

You won't save very much because the home-owner and the agent will be paid as soon as financing clears.

There's no real clear incentive to pay for a home in cash unless the owner/agent of the home wants to under declare how much they got for the home for tax reasons.

Illusionz
Illusionz

@FastChef
You're unlikely to get it cheaper. To the seller your money isn't any more valuble than bank money.

Dreamworx
Dreamworx

@FastChef
interest rates would have me end up paying more
I don't think you understand what I am saying...

Fried_Sushi
Fried_Sushi

@Illusionz
Ask any real estate agent or even fucking google it, in cash vs loan, cash wins.

Booteefool
Booteefool

@Fried_Sushi
A seller will not notice the difference.

hairygrape
hairygrape

@Supergrass
Well depends what interest you would be charged on a mortgage for it? It isn't hard to work out jesus

Sharpcharm
Sharpcharm

@Supergrass
Probably about $10k and then whatever interest you would have payed for a mortgage. The other user that posted is right though. You are losing much, much more by just not taking the money and reinvesting it. Mortgages have lower interest rates than the ROI on a lot of investments. There are only super rare situations where you ever want to buy a house in cash. Even multi-millionairres mortgage.

Evilember
Evilember

@DeathDog
This.

OP is losing money

Nojokur
Nojokur

@Supergrass
Op, it really depends on your market and the sellers preference. I have lost houses because other people offered 50k less than me in cash, for a house in the 400s range.

If you do all cash then shoot for a quick closing. Seller prefer cash because there is no financing contingency so that is one less point of failure. You can close in a couple of weeks with cash instead of over a month.

You can even waive inspection contingency if you get a pre-inspection done, making your offer even more attractive.

Keep some extra cash above your offer price, you will need money for closing cost fees. Plus you need some cash on hand for unexpected repair expenses.

w8t4u
w8t4u

@TurtleCat
it could cost an extra 80,000 in interest how do you not see that?
And the money you pay might earn you $240,000 in an index fund. How do you not see that?

haveahappyday
haveahappyday

Uh, 170k?

5mileys
5mileys

@Nojokur
f you do all cash then shoot for a quick closing. Seller prefer cash because there is no financing contingency so that is one less point of failure. You can close in a couple of weeks with cash instead of over a month.

First, with pre-qualification there's little chance of a financing going sideways.

Second, if the sellers still live in the house, chances are they won't want a fast closing. They have to do stuff on their side to move and a coupe of weeks may not cut it.

Third, unless the house has sat on the market for a while, no seller is going to cut price that easily.

Emberfire
Emberfire

@StrangeWizard
@StrangeWizard
this OP
you would be a moron to front the bill

SniperWish
SniperWish

@w8t4u
money you save
FTFY

RavySnake
RavySnake

@Supergrass
Do you like throwing money in the trash?

Youd lose money. Interest rates are ~4% invest whats left after the down payment into an index. Unless youre a columbian drug lord buying with cash is a waste of money

Dreamworx
Dreamworx

What most people in this thread aren't talking about is the risk factor. Obviously a few years ago investing in a market index would make sense. Now that the markets are at all time highs, your risk vs reward ratio has also increased. It's up to you to determine how much return you need for the risk you are taking , but it would have to be above ~4% that the interest rate costs. Couple that with inflation of say 1.5% and you need a return of 5.5% without factoring in risk. Hedge your bet accordingly ; )

eGremlin
eGremlin

@Dreamworx
I considered this, but if you are looking at the scope of a 15 or 30 year mortgage, that market downturns are irrelevant
In addition, the burden of the mortgage lessens due to inflation

That said buying a home in suburbia is fucking retarded. It means you had children and are now exiled to a life of yardwork and beta provision

BlogWobbles
BlogWobbles

I'd buy it in cash just to avoid yet another monthly bill.

Also, all these people saying "borrow and invest it"? No thanks. That's literally what the 1920s personal bankruptcies were from - individuals borrowing as much as they could to invest then getting fucked when the stock price crashed.

Id rather be able to afford the risk, tether than take it blindly

whereismyname
whereismyname

@BlogWobbles
??? ....
Nobody is talking about borrowing any money...
He has $170k in cash...

massdebater
massdebater

@whereismyname
Literally everybody else in the thread is telling him to borrow money instead of paying it in cash

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