Should We Buy A Home Outright Or Get A Mortgage?

Jacob Passy  Fri, September 10, 2021

My wife and I have nearly $600,000 in our investment portfolio. Should we buy a home outright or get a mortgage?  ‘We think we know where and how much we want to spend on a house, but we don’t know how we should buy that house’

Dear Market Watch,  My wife and I are Americans living in London. We currently rent, mainly because London real estate is hugely expensive but also because we know London is not our long-term future. In the next year or so, we have plans to move back to the U.S., where we’ll purchase a house and start settling down a bit.

My wife and I are in our mid-30s. We have no kids and no desire to have a family, and we’re currently sitting on about $580,000 in our investment portfolio. This amount does not include our retirement savings. 

We think we know where and how much we want to spend on a house (around $400,000), but we don’t know how we should buy that house. Is it better to take out a mortgage and have the gains from our investments pay off the mortgage over time? Or should we just purchase the house outright? We’re obviously thrilled to even be in a position where that’s even a consideration, but we just haven’t found any solid advice for which is better.

Sincerely,  Returning to America

Dear Returning,  I must commend you for being so proactive in planning for such a major financial step. Often I hear from MarketWatch readers who appear to be rushing into homeownership. Maybe they’re attempting to keep up with the Joneses, or perhaps they’re worried about home prices getting too expensive for their wallet. Whatever the case, you and your wife are certainly in an enviable and comfortable position, and the fact that you’re not running headlong in buying a house suggests to me that whatever decision the two of you ultimately make will be well-considered and appropriate for your financial situation.

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https://finance.yahoo.com/m/b92e0353-6098-3abb-8ca1-77ac509d55fc/my-wife-and-i-have-nearly.html