General disclaimer: This article is an opinion piece and should not be construed as financial or investment advice. Please contact Steve Dixon to learn about the best home financing options for your unique situation.
This article discusses whether it’s better to buy a home in Flower Mound using your own cash or a home mortgage loan from a bank.
Let’s get started…
Buying a Flower Mound home with cash – what are the pros and cons?
The main advantage of buying a Flower Mound home with cash is that you will own your own home outright. You won’t have a mortgage to pay each month, and you’ll simply be responsible for paying property taxes, electric, HOA dues, water and the other standard maintenance costs that come with running a home.
Buying a Flower Mound home with cash may be advantageous for certain people who are highly liquid i.e. people who are comfortable with spending a significant amount of cash on an asset in order to own the asset outright.
There are clearly some advantages that come with buying a Flower Mound home with cash.
But what about the cons?
The most obvious concern is that the average home in Flower Mound has a median value of around $400,000 according to NeighborhoodScout.com (as of November 2019).
While some home buyers may not be concerned with debiting $400,000 from their bank account, to the average woman or man living in America $400,000 is a pretty serious chunk of cash.
According to the Time Value of Money (TVM) a dollar in the present is worth more than a dollar in the future (Investopedia.com).
Spending $400,000 on a home outright could mean that you’ll potentially miss out on opportunities to gain from that cash.
For example, rather than spending $400,000 to own one home outright, you might use $400,000 to acquire several properties with the help of bank loans.
By acquiring several properties, you can live in one property, and rent your other properties to tenants.
Thousands of landlords agree this is a proven method to earn significant income by leveraging a combination of cash and bank loans.
Buying a Flower Mound home with home mortgage loans – what are the pros and cons?
As we touched on in the paragraphs above, buying a home or several homes in Flower mound using bank loans is a smart decision mainly because of TVM.
When you spend $400,000 cash to own your home outright, that money is gone forever.
When you leverage $400,000 cash to control one or more properties with the help of bank loans, you’ll still get to live in your dream home, but you’ll also have the opportunity to continue generating income with your cash (or use your cash however else you like).
The “downside” of having a home mortgage to pay is immediately negated as soon as you take TVM into consideration, and leverage your excess cash to generate additional income.
The additional income that you earn should ideally cover your living expenses and allow you to live for free.
Many people have spent $400,000 cash on bank loans in order to live in one home, rent the remaining properties to tenants, and essentially retire forever.
Once you discover the right mortgage options in Flower Mound there’s a good chance you’ll actually enjoy the process of getting a home mortgage.
Purchasing one or more Dallas-Fort Worth properties with the right Flower Mound mortgage lender could be one of the best decisions you ever make.
You can contact Steve Dixon today to uncover your very best home mortgage options in Flower Mound and the surrounding DFW communities.