If you win a few million dollars in the lottery, is it still advisable to take out a mortgage to buy a house?

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I was just wondering, if you win a few million dollars and you’re deciding to buy a house – should you pay for the house ($ 325,000) up front? Or, is it advisable to still take out a mortgage loan and pay it back over say 5-10 years? What would be the best strategy to maximize my savings and money growth?

6 Comments
  1. Reply
    Wishsong
    May 2, 2011 at 5:38 am

    Take a mortgage and then put the rest in for interest. But the banks are having problems right now >_<

  2. Reply
    Agent86
    May 2, 2011 at 6:30 am

    I’d buy the house and live off the interest from the rest of the money. You will need to pay taxes on the house, and why carry a mortgage when you can negotiate a better cash price right now?

  3. Reply
    LJG
    May 2, 2011 at 6:33 am

    If you win a few million, a $ 325K debt isn’t going to do a lot for you, but any amount of time that you have debt will offset your taxes. Negative gearing will also help, but you have to realize that negative gearing actually means losing money!

  4. Reply
    paintedhorse30
    May 2, 2011 at 7:17 am

    LOL–of course it would be inadvisable to get a mortgage. Never owe anyone money if you don’t have to.

  5. Reply
    arielmoonstar
    May 2, 2011 at 7:50 am

    I’d buy a house straight up. why pay all the interest banks charge if you don’t have to? And if you ever did run out of money or something… you have a house that is completely yours..

  6. Reply
    mark0381_FINA4242
    May 2, 2011 at 7:53 am

    With the stock market down right now you need to ask yourself about how much risk you’re willing to take on. This could be a once-in-a-lifetime opportunity to get a little of that money into the market and wait for it to grow. However, because of the high rate of volatility in the market, and the fact that you have enough for a house already, I would say that you should just buy the house. The reason is that taking debt would allow you to get a bit of a savings in taxes; but, there is no reason to sit on a bunch of cash and let it lose its value because of inflation. Think of it this way, if you were to take out a mortgage, you should definitely have plans for the cash. Good luck managing your winnings!

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