Quote:
Originally Posted by Vampyr
I've also decided not to immediately go for a house. Instead of getting a mortgage, I'm just going to save up until I can pay for the house in cash. I want to try to live a completely debt free life, as I don't have any school loans to pay back. So I'll be in an apartment for the next 8 - 10 years.
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I know that seems like a good idea, but generally it really isn't. You get significant tax breaks when you are paying a mortgage, and depending on what kind of house you buy, you could end up with just a 10 year mortgage (lasting as long as you plan to save up for the house anyway). In addition, you can defray the cost of your mortgage by renting out rooms.
Meanwhile, if you want to buy a house outright, you would be saving up for it while paying rent on your apartment at the same time, and remember that no matter how much time you spend in that apartment, you will never own it. The rent you pay on the apartment is lost whereas money you pay into your mortgage is equity which boosts your credit rating.
It makes sense to rent an apartment if you're young and still likely to move around. Once you feel that your situation has stabilized, though, you shouldn't be saving up to try to buy a house outright. The math doesn't really work out in your favor.