It used to be the case that individuals and families who wanted to buy homes had to scrimp and save for years to come up with a 50% down payment and then pay off their loans within a few years. Today, Residential Mortgages in Boston MA and across the country require much lower down payments and have longer loan terms, making it possible for far more consumers to afford and purchase houses.
Even those consumers who could afford to pay for their homes outright are usually still better off taking out mortgages. Read on to find out why.
Sense of Security
It’s always good to have some cash in the bank. Even if consumers can afford to buy their houses without a mortgage, most of them will risk placing themselves in volatile financial situations. Life is full of risks, so it’s always better to have some money put aside to deal with an emergency like an illness, job loss, or family issue.
Investment Opportunities
Taking out Residential Mortgages in Boston MA ensures that new homeowners will still have enough cash on hand to take advantage of opportunities as they arise. Imagine how frustrating it would be to use all available funds to purchase a house and then be presented with a once-in-a-lifetime business deal that requires immediate action. The ability to take advantage of investment opportunities as they come up can offset the extra money homeowners who take out mortgages will spend making interest payments.
Interest Deductions
Not all taxpayers realize this, but home mortgage interest is deductible on tax returns. The value of potential tax deductions will depend on several factors, including the amount of interest paid and what tax bracket homeowners fall into, but it’s worth discussing at least one example.
Say a homeowner pays $30,000 per year in interest on his or her mortgage, which is not uncommon in higher-priced housing markets. If the homeowner falls into the 28th percentile tax bracket, those interest payments would make him or her eligible for $8,400 in deductions.
The Bottom Line
Not sure whether to take out a mortgage or try to pay for a home outright? Click Here to learn about one lender that is committed to helping clients in diverse financial situations make sound decisions about homeownership.
