Many homeowners look forward to the day their mortgage is paid off and their home belongs to them, free of debt. Some people may be able to pay cash for the home and own it free and clear from day one. While not many can pay cash for a home even if they wanted to, it may not be the wisest decision to do so. Let’s elaborate.
A possible disadvantage of paying cash for a home is it becomes an investment of sorts that you can’t get back. Individuals that are self-employed and have seen investment success may decide to purchase a new home for cash while funds are available. However, issues may arise if there is a need for the money should economic circumstances become less viable. Mortgage investors may not be responsive to giving back the money as a new mortgage or home equity loan. A mortgage with ongoing payments may help with the ebb and flow of being your own boss, and the extra funds can be placed into investments easier to liquidate as necessary.
You may be told that having a mortgage is necessary as a tax deduction, though this may not be a good economic idea and should be discussed with an accountant. Discussing these can help determine the rate of return received from using cash for a home.
This update is by hard money lending Miami company Monroe Funding Corporation, a direct equity lender serving clients throughout Central and South Florida. We specialize in first mortgages on non-owner occupied residential and commercial property investments as well as real estate loan options. Our fast and flexible loan programs get you to the closing table quickly and professionally. For more information on hard money lenders Miami or hard money loans Miami, please call 954-816-0388 or fill out our application.