Suppose for the purposes of this question that you have (or can temporarily borrow) the entire cost of the house. Then you can a) get a mortgage on the house to pay off over a long time, or b) buy the house outright and then get a home equity loan.
The effects seem similar:
- In both cases, you net pay only a part of the cost of the house
- In both cases, you have to pay back money over a long time
- In both cases, the loan holds part of the equity of the house
So what are the advantages and disadvantages of each, from feasibility, interest rate, tax and legal ramifications points of view?