With mortgage rates at record lows, you’d think I’d desecrated the flag when I told my real estate agent that I wanted to pay cash for our house.
After a couple of real estate agents reiterated the same point (regarding my financial foolishness), I decided it was time for my wife and I to re-evaluate our decision to buy a house with cash.
I got out my trusty calculator and ran certain scenarios. If we borrowed at ‘x’ percent and then decided to invest the money we would have used to buy the house, we could get ‘y’ percent. On paper, it actually looked like anyone with half a brain would borrow money.
I felt old fashioned and like a financial imbecile for wanting to buy a house with cash.
And so, for a week or two, we decided we should follow this new enlightened advice and get a loan.
Fortunately, we later vetoed our own decision and decided once again to pay cash for the house.
Reasons to Pay Cash for a House Even With Record Low Mortgage Rates
1. The Bible Promotes Debt Free Living
They key to understanding what the Bible says about debt revolves around two key words: self-control and obligation.
I’ll be the first to admit that I don’t think borrowing money is sinful. However, I do think that borrowing (especially in excess) is a sign that a person could be denying the Spirit’s work of self-control. I think that a person who has excessive amounts of debt would admit that, for a point in their lives, they made decisions dictated not by the Spirit, but by the flesh. When we come to Christ, one of the things we must learn to do is to harness our desires and instead pursue the work and will of God.
We form a sort of commitment, oath, and covenant with those from whom we borrow. Limited and reasonable number of such agreements will have little pragmatic impact on our lives. However, if we borrow in excess, we limit our freedom to serve God because we have made too many covenants with lending institutions. We can no longer go where he sends because we’ve over committed ourselves to other masters.
2. We’ve Committed Not to Let the Calculator Be Our Guide
Where we live and what we do with our time is not determined by what is most profitable. We’re challenging ourselves, my wife and I, to seek first the Kingdom of God and his righteousness. That means the calculator does not have veto power in our decisions. Obviously, we consider our finances, but we don’t want to pursue only what is most profitable. Instead, we want to make choices that give us the freedom to be able to respond when we feel a burden for a certain type of ministry.
3. If it Ain’t Broke, Don’t Fix It
We’ve been able to save up the cash needed to buy a home by avoiding any form of debt. We had a house mortgage on our last house, but lived well below our means so that we could have the funds necessary to pay off that house.
- In 2012, we paid off our mortgage on a previous home.
- In 2006, we paid off our last student loan. We’ve never looked back.
- In 2003, we paid off our last car payment. We’ve never looked back.
We’ve never had any credit card payments and don’t have any intentions on going back.
The reality is that we got to this situation by avoiding debt. Why, then, at the point where we could actually purchase a house with cash would we change our strategy? Thus, we’ve strived to live debt free for the last dozen years we’ve been married and haven’t for a single moment ever regretted choosing to live on what we could afford instead of what we could borrow.
4. Life Without a Mortgage Payment is Appealing
I hurt when I see people forced (apparently so) to make decisions out of reverence for the dollar. They move places where the pay is good. They pick jobs where the pay is good. They take shifts where the pay is good.
Without a mortgage, we have less demands on what we must make to live.
The result is a freedom of choice. My goal is not to use this freedom for self-indulgence, but to love others.
5. The Person With the Most Toys Doesn’t Win
My theology does not accept the premise that whoever has the most at the end of life was a better steward. Some people read the parable of the talents and conclude that the more you have to give, the more pleased God is with you. I think our talents include much more than our financial resources.
By making the decision to buy a house with cash, I may end up with less resources to give into God’s Kingdom (or perhaps not). But one thing I can guarantee is that I’ll have more resources of time and energy to give.
6. I Refuse to Take Advice from Those Whom I Pity
I know a person who owns a lot of vehicles and a lot of property. He makes a very good income, but everything he ‘owns’ has a high mortgage or loan associated with it.
Do I envy a person like that? Absolutely not. I pity that person.
If I respect the decisions you’ve made with money and if I see the fruit of those choices, I’m more likely to take your advice than to take the advice of someone with whom I wouldn’t ever consider trading situations.
So, what do you think? Did I make a bad choice by deciding to pay cash for a house?