Our lofty plan for buying a house
We want to buy a house in cash. That’s right – no mortgage, no loans, no interest. Just cold, hard cash.
GULP. It feels scary to say that out loud. We aren’t 100% dedicated to this idea yet, but it is SUPER appealing to us. Here’s why:
No mortgage means no debt
If you’ve followed our story at all, you know that we had student loan debt that was the size of a small house. We paid thousands in interest, and it was SO frustrating. We want our money to be used for leaving a legacy for our family, our community, and our world. Having no mortgage means we can stop paying interest and start doing better things with our money.
Interest makes us sick
I mean, we love interest that works in our favor, but interest we pay to someone else? This article sums it up pretty well. The average house cost in the US is between $200,000 – $250,000 depending on your source.
On a 15-year $250,000 loan, at current average interest rates, you pay $86,933.32 in interest over the life of the loan. For a 30 year mortgage, that amount skyrockets to $220,023! You practically pay for your house TWICE with the kind of interest.
YIKES.
We want to OWN our home
It’s funny how anyone who pays for a house at all is suddenly a home owner. Sure, you have the responsibilities of home ownership (taking care of repairs, keeping the house and lawn in good working order, snow removal, etc), but do you actually own your home?
Nope. If you are paying a mortgage, then the bank owns your home, not you. If we’re going to be called home owners, we want to own it ourselves.
Why we are still saving
We know that this isn’t a popular way to go about things. We know that many people think we are “wasting money” on rent. It’s going to take a long time to save up enough to buy a house with cash, but here are the things that are keeping us going right now.
Where to buy
We haven’t decided what a good place would be for us to live long-term yet. There’s no point in buying a house in a place we don’t necessarily want to be at long term. If the real estate market changes an we decide to leave, then we could have big problems. In fact, the townhouse we currently rent fits this scenario. The owners bought it, had a job change, but the market shifted and they were upside-down on their mortgage and couldn’t sell it. Not a situation we want to put ourselves in!
Our current rental fits our needs
The place we rent now is the most ideal location for us at this stage in our life. It’s exactly what we wanted in a home. Plus, we got it for a steal of a price. We aren’t in a hurry to get out of here!
Patience pays off
We don’t want to be so anxious to chase after the “Joneses” that we get in over our head. Sure, we could probably afford a pretty nice house right now based on the bank’s standards. However, we feel that if we were to get a really nice house and be stuck paying our mortgage for 15-30 years to keep that lifestyle up, we aren’t being true to US. We would rather wait and be purposeful and intentional with how we spend and what we buy.
No mortgage? Now hear us out.
We don’t think it’s bad if you have a mortgage, nor do we think that we are better than anyone else if we pay cash for a house. It’s just something we feel convicted about and want to pursue for us!
We still aren’t 100% sold on this, but it’s our lofty goal! We do know this though: if we end up with a mortgage we will pay at LEAST 20% down in cash, use a 15-year fixed mortgage, and our monthly payments for our house will be UNDER 25% of our take home pay. And that mortgage would NOT be around for 15 years either – we would ditch that with the same intensity we did our other debt!
Have you ever paid cash for a house? Would you ever consider it?