2 July

House buying guide: cash vs. mortgage

Houses are probably the biggest investments you have to do in your life and not everyone can afford to make this expense at once and pay with cash. However, many of us struggle to do exactly that and postpone buying a home trying to raise the money for a down payment; because everywhere you turn right now, you hear how difficult it is to pay back a debt, so we become more fearful of taking a loan by the day. It seems logical that buying your house with cash is the smart option, but things are not that simple. You need to take into consideration the inability to pay in cash and the financial strain this move would cause, instead of thinking about an ideal situation when everyone can have the money for buying a house ready in a minute. Military mortgage loans in Canada offer people the opportunity to purchase the house they deserve without having to wait for years until they save enough money to afford it.

 

Do mortgages make sense?

Living with the belief that all mortgages are bad will simply limit your options. When purchasing something, you need to take into consideration all possible offers and weight the advantages and disadvantages of each option. If taking a mortgage will allow you to purchase a better house, you should not avoid doing so. Some mortgages offer great terms and enable you to afford the house of your dreams without having to save money for decades. The military mortgage loans in Canada for instance, provide advantageous terms for people that served in the military. Obtaining financing will also allow you to save cash for renovations and major repairs. Even if you have the cash ready, you should not spend them all on the house, because moving into a new home will require further investments. Taking out a mortgage will also help you avoid paying taxes, because interest payments are tax deductible. Mortgages can also help you keep the liquidity you have for other investments that will provide returns and allow you to pay back the loan.

 

Paying cash saves you money

 

Mortgages are sometimes the only solution you have to afford a home and this is not necessarily a bad thing. As long as you are confident that you can pay the loan back, there is no need to worry about taking a mortgage, because a house is probably the only thing that is worth a bog investment in this world. Paying cash for a house is ideal, because you will not need to spend money on interest and closing costs. Sellers are also more enticed to take the offer of the people paying cash, because there is no risk of the buyer backing out, because their financing request has been turned down.