Whether or not you need a mortgage to buy a home is a decision that you have to make on your own. You know your finances better than anybody else. There is no reason to let an outside party make such a big decision. Simply put, buying a home is a big step in your life no matter if you do so with a mortgage or decide to pay cash.
If you do not have enough cash to pay for the home, as well as any closing costs, you need to apply for a mortgage. This is the situation that most buyers are in. Sure, it would be nice to purchase a home with cash so that you do not have a monthly payment. But how many people are really lucky enough to be able to do this? While you may have the chance later on in life, most find that buying a home is best done with a mortgage.
Even if you have enough cash to pay for a home in full you may still want to use a mortgage. Why would you want to do this? For one, it ensures that you keep some of your money liquid in case you need it for something else. In other words, you may not want to take all of your money and put it towards a home – this does not make sense in some cases.
When you pay in cash you are going to avoid the monthly payment associated with a mortgage. On top of this, and most importantly, you also get to avoid any interest that is associated with the loan. As you probably know, the interest on a mortgage can be expensive. The higher your rate and the more you borrow the more you will pay in interest over the life of your loan. If you have the money, this fact alone may be enough to push you towards paying with cash.
It does not take much detective work to determine if you need a mortgage to buy a home. Ask yourself these two questions: how much do I want to spend? How much money do I have in cash? If you have more cash than you want to spend, you at least have the option of paying in full at closing. If you don’t, you need to start searching for a lender. It does not get any easier than that.
If you need a mortgage to buy a home it is nothing to be ashamed of. This is what the majority of buyers have to do.