Better mortgage or cash to buy a house?

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Better mortgage or cash to buy a house?

Given the ongoing financial crisis, is it preferable to buy a house by turning on a mute or paying in cash? Here are the various aspects to evaluate to make an informed decision (both in the case of a first or second home). When you choose to buy a house, you must always put yourself in the perspective of those who make an investment, thus evaluating all the related aspects such as the concessions related to the first home , taxes and fees related to the purchase, deductions, etc with

In a moment like the one we have been experiencing for some years now, with interest rates at historic lows , and in contrast to a financial market that does not allow for large returns, it becomes more convenient to buy a house by taking out a mortgage (for other very complicated to obtain), or deprive yourself of a good slice of liquidity so as not to have forms of debt?

The answer must consider numerous aspects, some of which do not directly concern the purchase of the property , but other aspects of one’s existence.

The deduction of interest expense: how much is it worth buying with a mortgage?

The tax deduction has a relatively modest impact at the time of having to make the choice on the purchase methods and this regardless of the fact that the accrual of compound interest on a mortgage logically ends up strongly increasing the total outlay compared to the initial price. paid on the house to the seller. Furthermore, the tax deduction rate can be changed at any time, as well as the maximum deductible sum, for which it offers no certain starting point, for which to make an informed choice.

What factors to consider when choosing between cash and taking out a mortgage?

A first aspect is that of the duration of the loan : the greater and stronger will be the incidence of interest expense, and the lesser your choice should be, especially if you have valid alternatives, such as the possibility of a cash purchase.

Purchase ‘cash’ which must therefore be evaluated but without sacrificing all its liquidity. Before buying in cash, it is also necessary to focus on a strong devaluation of the property.

Article Categories:
Real Estate

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