Should I buy a house now in full or do something else with my money?

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ComposerR
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Joined: Thu May 30, 2019 5:19 pm

Should I buy a house now in full or do something else with my money?

Post by ComposerR » Thu May 30, 2019 5:22 pm

So I can buy a house 100% in full with cash here in Phoenix where the housing market is super high or save my money and hope for the market to dip. Or maybe I am looking at it all wrong and invest my money elsewhere instead of buying a house.

Why do I want to buy a house? I'm looking to buy because I want to live here in the Phoenix, AZ area for a very long time (over 10 years) so buying seems to make sense because I want stability and no mortgage but I'm just not sure if now is the right time, especially with the market as high as it is now.

In your opinion, do you think I should buy a house now in full, which would eliminate my mortgage payment or should I continue renting, wait and save my money, invest it and then buy later when the market drops?

mhalley
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Re: Should I buy a house now in full or do something else with my money?

Post by mhalley » Thu May 30, 2019 6:19 pm

You basically are trying to market time the re market, and you prbly know what bogleheads think of market timing. Whether to buy or mortgage is a personal decision. On the one hand, markets are still pretty high. On the other, no one knows when the correction will occur. It come down to whether you want to be debt free or not. Neither decision is a mistake.
Since there is no urgency in buying the house, you have time to look around for a great deal and get exactly what you want. An all cash offer might make you attractive as a buyer, plus save on closing costs.
https://www.thebalance.com/secrets-for- ... et-1798774
https://www.realtor.com/advice/finance/ ... good-idea/

runner3081
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Re: Should I buy a house now in full or do something else with my money?

Post by runner3081 » Thu May 30, 2019 6:29 pm

If you are ready to purchase a house and will be there for at least 10 years, then purchase one.

What may or may not happen doesn't matter. Things could crash or keep going up. PHX is, year over year, one of the largest growing areas in the country. Even in the last 6+years since we moved in, it is amazing how much growth there has been.

...or, it could all come crashing down in 2 years. No one knows.

btenny
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Re: Should I buy a house now in full or do something else with my money?

Post by btenny » Thu May 30, 2019 6:59 pm

Yes housing in Phx is high right now. But it has been this high before. So it might go down or got even higher. We don't know. But your money will earn you a good return of imputed rent.. So in the long run of ten years or more you will be fine.

So I suggest you buy a nice home and enjoy it.

Good Luck....

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oldzey
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Re: Should I buy a house now in full or do something else with my money?

Post by oldzey » Fri May 31, 2019 11:55 am

"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

delamer
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Re: Should I buy a house now in full or do something else with my money?

Post by delamer » Fri May 31, 2019 12:58 pm

You really have 2 decisions to make:

1) Should I buy a house now?
2) If I buy a house now, should I pay cash or take a mortgage?

We could help with decision on #2 if you provided more information on your finances.

As far as #1 goes, it certainly makes sense to buy if you are planning to stay for 10+ years. It is more important to determine if you can get what you want for an affordable price than to hold off in the hopes of a housing market downturn. Remember that housing downturns don’t happen in a vacuum; they mean that something has gone wrong in the local economy.

boogiehead
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Re: Should I buy a house now in full or do something else with my money?

Post by boogiehead » Fri May 31, 2019 1:09 pm

Do not think of house as a financial investment.... if its the right place where you can see yourself living and enjoying the place say for at least five years or more than I would do it.

Dottie57
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Re: Should I buy a house now in full or do something else with my money?

Post by Dottie57 » Fri May 31, 2019 1:15 pm

The market will drop sometime but it could be 20 or more years in the future. Buy if you want to own your own home.

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dm200
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Re: Should I buy a house now in full or do something else with my money?

Post by dm200 » Fri May 31, 2019 1:18 pm

ComposerR wrote:
Thu May 30, 2019 5:22 pm
So I can buy a house 100% in full with cash here in Phoenix where the housing market is super high or save my money and hope for the market to dip. Or maybe I am looking at it all wrong and invest my money elsewhere instead of buying a house.

Why do I want to buy a house? I'm looking to buy because I want to live here in the Phoenix, AZ area for a very long time (over 10 years) so buying seems to make sense because I want stability and no mortgage but I'm just not sure if now is the right time, especially with the market as high as it is now.

In your opinion, do you think I should buy a house now in full, which would eliminate my mortgage payment or should I continue renting, wait and save my money, invest it and then buy later when the market drops?
What makes you think that you can so "time" the real estate market and buy at a lower price than now?

Prahasaurus
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Re: Should I buy a house now in full or do something else with my money?

Post by Prahasaurus » Fri May 31, 2019 1:58 pm

If 10 years is your horizon, I don't see an issue. Buy the house. Even if there is a major correction (nobody knows), 10 years is a long time, and you should be able to sell the house for more by then (but nobody knows).

In this crazy environment, I think owning a home outright is a huge advantage.

Good luck.

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JoeRetire
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Re: Should I buy a house now in full or do something else with my money?

Post by JoeRetire » Fri May 31, 2019 2:19 pm

ComposerR wrote:
Thu May 30, 2019 5:22 pm
So I can buy a house 100% in full with cash here in Phoenix where the housing market is super high or save my money and hope for the market to dip. Or maybe I am looking at it all wrong and invest my money elsewhere instead of buying a house.

Why do I want to buy a house? I'm looking to buy because I want to live here in the Phoenix, AZ area for a very long time (over 10 years) so buying seems to make sense because I want stability and no mortgage but I'm just not sure if now is the right time, especially with the market as high as it is now.

In your opinion, do you think I should buy a house now in full, which would eliminate my mortgage payment or should I continue renting, wait and save my money, invest it and then buy later when the market drops?
In my experience, trying to time the housing market is seldom successful, just like trying to time the stock market.

If you really want a house, buy it. Deciding if you should get a mortgage or not is a personal decision separate from the buy/rent decision.

Personally, I wouldn't have the price of a house sitting around in cash. And having a mortgage doesn't keep me awake at night. But your mileage may vary.
Don't be a lemming.

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Mullins
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Re: Should I buy a house now in full or do something else with my money?

Post by Mullins » Fri May 31, 2019 3:14 pm

ComposerR wrote:
Thu May 30, 2019 5:22 pm
I want to live here in the Phoenix, AZ area for a very long time (over 10 years)
What are the plans after ten years? No one knows if you'll be up or upside down in the eleventh year and so on going forward so depending on your plans would today's decision have hardly any impact then or does that need to be considered? Naturally, in eleven years a whole new world of plans yet unknown to us might have superseded today's plans.
ComposerR wrote:
Thu May 30, 2019 5:22 pm
In your opinion, do you think I should buy a house now in full, which would eliminate my mortgage payment or should I continue renting, wait and save my money, invest it and then buy later when the market drops?
Conventional wisdom might dictate using leverage by purchasing, putting the down payment (and fees) to work IF mortgage rates are sweet and low enough that it might make sense to invest the balance of the savings?

invest4
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Re: Should I buy a house now in full or do something else with my money?

Post by invest4 » Sat Jun 01, 2019 6:21 am

IMy two cents...

Buy the house with 20% down and 30 year mortgage for the rest.

* Rates remain historically low

* 30 year mortgage provides you lower payment and some flexibility / breathing room if needed (in case of job loss for example)

* Pay back mortgage with future inflated dollars

* Invest remaining according to your risk appetite.

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