Which is better? The quick answer: CASH.
- Quicker closing (which makes you more competitive)
- No interest payments.
- No mortgage insurance.
- Avoid mortgage-specific closing costs, e.g. origination fee (which is BS)
Assuming you have the cash on hand, there are essentially no irreparable cons to paying cash for the simple reason that you can always take a loan out on your home later.
Meanwhile, the short-term con is that you don’t have cash on hand, so you have opportunity costs in other investments.
Enough cash = enough cash for other expenses or emergencies. If you buy in cash but then immediately go into credit card debt, that was obviously a bad decision.
This post was shamelessly inspired by (stolen) from this tweet response to the same question.