Oct 30, 2017
Learn how to think through whether or not to finance a home.
A friend called me. Should I finance the home or pay cash?
What is the fixed rate? 3.5%
1. Still very low rates.
2. It is tax deductible if you itemize. Will it still be under tax reform?
3. If rates go to 6%, will you kick yourself?
4. You can earn a dividend on a stock that yields 3.5% and
earn
enough to pay it.
5. Cautious of risk? Think we could be at the peak of a bubble?
Then don’t borrow 80%, maybe only borrow 60%. Put down more and borrow less. That way if prices drop you hopefully won’t be under water.
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