Buying a new home? If so, getting a home loan could be a great option for you.
There are many advantages to taking this approach when buying a home, even if you have enough cash to purchase it outright.
Many don’t understand these benefits and never capitalize.
Here’s a look at the 5 benefits of getting a housing loan.
Liquidity
Buying a home with cash comes with the benefit of not having to make payments on it. But unless you’re incredibly wealthy, tying that much capital into one asset may not be the best move.
Taking out a loan on a new home keeps funds freed up. In the event that an investment opportunity comes along or you need the money, you won’t feel obligated to sell your house—a headache of a project on its own.
Tax Benefits
Buying your home outright will cost you lots of money in taxes. By getting a home loan, you’ll save on taxes and be able to pay them more steadily over the course of your mortgage.
The Goods and Services tax on home purchases has dropped a lot in recent years. It’s down to 5 percent and even lower for affordable homes that qualify. Getting into a home now instead of liquifying assets to purchase in a year or two allows you to reap the benefits of this current trend.
Find the best mortgage broker near you to learn more about this.
Affordable Home Loans
It used to be that people purchased homes for cash because taking out a home loan was not a smart business move. But right now, home loans are more affordable than ever.
You can get a 15-year fixed mortgage for 2.25%. Only a year ago, this figure was well into 3-percent. There hasn’t been a better time to buy in a long time.
Capital Appreciation
Cities and major metropolitan areas all over the U.S. are experiencing large growth when it comes to selling their homes. Getting an affordable home mortgage could allow you to grow your investment without shelling out the cash right away.
Instead of tying that money up in a home, you can use your liquid assets for other things and watch the value of your home appreciate.
Improved Credit
Making your monthly payments on time helps keep your credit score high. If you’re in the market to purchase real estate, this can help you lock in lower interest levels in the future.
Getting a Housing Loan on a New Home
There are many benefits to taking out a home loan if you’re considering buying a new home.
Keeping your assets liquid, benefiting from tax breaks, and taking advantage of the current real estate market (for both favorable rates and selling your home) are all examples. Purchasing your home outright won’t entitle you to any of these benefits.
For more real estate investment advice, check out the rest of our blog!