Weekend country cottage---cash only?

polieSeptember 4, 2008

I know a weekend country cottage is a luxury. Do you think it's OK to get a mortgage on one, or is it the type of thing that if you can't pay for it 100% cash, you shouldn't be buying it at all? I suppose if I knew real estate didn't go in violent up & down cycles, it would be less of an worry because then you could always sell your second home without a loss if you get in a bad pinch like being laid off for an extended period. By the way, by cottage I do mean something modest, not a big country estate or anything. Thank you!

Thank you for reporting this comment. Undo

Mortgage interest rates for property other than primary residence is higher. That's one consideration. The other considerations have to do with your financial circumstances, your net worth, your age, the size of your retirement nestegg, your financial responsibilities, etc. You really need a financial planner to sort all of that out.

But for starters, consider: (1) If you buy outright, you'll have a lot less ready cash, and selling because you need the money is not good -- you don't want to put yourself in that kind of bind; (2) Could you possibly rent the place at times when you don't use it? That would help pay mortgage and other expenses; (3) What would you do with the money you do not plunk down if you take a mortgage, and, assuming it will be invested, for what purpose(s) with what time horizon, and what kind of appreciation can you realistically expect and how does that compare with the mortgage interest (I assume fixed rate -- NO BALLOON)?

Sounds to me you need a fee only certified financial planner, not a broker whose only interest is in generating lots of commissions.

    Bookmark   September 4, 2008 at 4:55PM
Sign Up to comment
More Discussions
Private College Savings - How much is enough?
We have approximately $62,000 saved in a 529 plan for...
Ontario - Canadian law question
Hi: I am hoping I can find someone on the forum who...
Do I need to give a 1099-misc to the lady who cleans for me?
For the first time ever, I began having a lady clean...
Investing for your Future
I'm wondering if most people today hire financial planners...
help!!! advice needed asap for 2nd mortgage
I need to take out $30,000 in equity for desperately...
Sponsored Products
Besa Lighting | Callisto 14 Cable Pendant
$342.00 | YLighting
Safavieh Indoor/Outdoor Area Rug: Safavieh Rugs Anatolia Brown/Tan 3 ft. x 5
Home Depot
MLRT22D45 MaxLite 2x2 Eco-T LED Recessed Troffer 45 Watts
Alliyah Hand-loomed Sun Flower New Zealand Wool Rug (6' Round)
Copeland Furniture | Sarah Sleigh Bed with High Footboard, Full
White Vertical Flat Panel Designer Radiator Heater 63 x 14 & Valves
Hudson Reed
People viewed this after searching for:
© 2015 Houzz Inc. Houzz® The new way to design your home™