Blue House on Grass

I think you’ll agree with me that making a house payment each month sucks.

About 6 years ago, I didn’t even think it would be possible to buy a house without a mortgage. I thought the only way I will ever own home is to borrow money. Man, was I mistaken. Looking back at all of the interest I have paid to banks makes me sick. I knew there had to be another way and there is. Here is an example of how one could actually make this a reality.

How a couple can buy a home without a mortgage

John and Kristy get married at 22 years old. John has a job paying $40,000 and Kristy is a teacher making $30,000. This is a combined income of $70,000 per year. They decide to live as cheap as they can until they can afford to buy a house with cash. They rent an apartment for $600 per month and decide to take very inexpensive vacations over the next 5 years. They are able to live on $40,000 per year which allows them to put about $30,000 into savings each year.

So in 5 years, they are able to save up $150,000 and pay for a house with cash!

This means that at age 27, they will have a paid-for house and be completely debt-free. But wait how can I live on $40,000 per year with taxes, rent and everything else I have to pay??? Glad you asked, here is a breakdown of what that would look like:

If you think that couples story is crazy, check out people that are living on even less:

Why should you pay cash for a home?

It may seem crazy to save up cash to buy a home without a mortgage. However, have you ever thought about the total interest that you would pay if you took out a 30-year mortgage? Well, if you borrowed $250,000 at 4% interest on a 30-year note, you would pay $179, 673 in interest! That is $10,000 per year for roughly 18 years in interest. I don’t know about you, but I would rather backpack Europe every year for 18 years than pay a bank that much interest.

Well, that is great but I already have a mortgage. What should I do?

Don’t worry, I have you covered. Check out the mortgage calculator below to see what your savings would be if you had a shorter term.

Would you like to have a paid-for home someday? Would you consider buying a house without getting a mortgage?

Refinance Your Student Loans or Credit Card Debt

With the average credit card interest rate around 15%, this could save you a ton of money over the long haul. Check out Credible who will help you refinance your credit card debt to as low as 4.99%. They even can help people with credit scores as low as 620. The average graduate who refinances through Credible saves $18,668. Get $50 cash back if you are approved with this link!

They also refinance student loans to as low as 2.60% APR. Use this link to get $150 cash back if you get approved for refinancing your student loan.