Is Taking Out a Mortgage to Buy a House in Atlanta GA a Good Decision or Not?
Which one is the best- buying a house with cash or taking a loan? This depends heavily on your financial standing or investment plan. Buying a house with cash has many benefits and so is buying it using a loan. Some people cannot afford to pay for a house with cash all at once, and so they opt for a loan. But if you have cash, you can purchase it at once. Also, a mortgage is a really big debt, but has its own positives as well. With a good payment plan, a mortgage can prove to be the best way to buy your new home in Atlanta GA real estate.
Benefits of acquiring a mortgage:
Greater liquidity
Buying a house with a mortgage in Atlanta GA real estate leaves you with some cash to invest in other businesses. Using all of your savings on purchasing a home might leave you with little or no money at all to invest. The good thing with a mortgage is that you can decide to pay long term for 30 years or short term of 15 years. This means you have enough time to repay your loan as you invest in different lucrative businesses.
Inflation
When you buy a house through a fixed interest loan, the interest rate remains the same throughout the term of the loan. When the inflation rises or goes down, you stand to benefit. For instance, if you buy a house in Atlanta at $200, and then its value rises to $210 over a year, you will still pay the same amount for the house. This is advantageous because if you wait to have enough cash to purchase a house, the cost could increase while you are waiting..
Low taxes
In the US, or similarly in Atlanta, if you acquire a house on loan your overall taxes are lowered. This is because the mortgage interest is deducted from your income tax. You will end up paying less income tax than you would if you pay cash for the same house.
The Downside of getting a mortgage:
Interest rates
Mortgages can be a good thing, but they could hurt you at the same time. If the interest rates for homes in the market fall, you won’t have any advantage as you will continue paying the same rate on the mortgage loan obtained.
Not really your home
There is a difference between paying cash for a house and purchasing it on loan. When you pay cash, the house is yours. But if you have a mortgage, it isn’t totally yours until you pay off the mortgage loan. Therefore, buying a house on loan requires for you to be able to continue paying the loan for 15 to 30 years unlike when you acquire it with cash.
Credit history required
One of the benefits of buying a house in Atlanta real estate with cash is that there is a smaller amount of paperwork to be completed in order for you to purchase it. When it comes to a mortgage, you have to submit your credit history among many other requirements for them to decide whether you qualify for a loan or not. This can be cumbersome and time consuming.
Also, depending on the trend of the real estate market that you’re in, it can be a good decision to either buy a home using cash or a mortgage loan. If you’re in a market with fluctuating prices and interest rates, buying with cash can be a good idea. On the other hand, if the market has steady interest rates and prices, then a mortgage can be the best decision.