334: 5 Reasons to Finance a Home Purchase

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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