Quote:
Originally Posted by innerSpaceman
Although it's becoming increasingly difficult for middle-class families to pay off a mortgage, buying a home on such terms is decidedly a middle-class circumstance. It's only a rich circumstances to buy a house outright, so that's what I took SL's statement to refer to. And if it did not, that's what I refer to.
|
You'd rarely find a rich person who thinks paying all cash for a house is a good idea.
Most wealthy folks would rather leverage that money, putting down just what they need to to make the payment pencil out. Then use the rest of the money (that this paid-off house would theoretically cost) to put down payments on rental properties, putting down just as much as they need to to make the property cash flow after accounting for maintenance and vacancy allowances.
Part of the reason for this is that in an upward-trending market, if you've put less down on a property, the amount of money by which your property increases in value represents a higher percentage in relation to what you've invested in it.
And now that I've bored you all to death, I'm going to go back to my sewing.