With a housing market that has been hot for more than a year now, many people are considering whether it makes sense to renovate their current abode in order to better fit current (and future) needs, or to start from scratch with a new home – especially given the ongoing historically low interest rate environment.
There are actually a number of both advantages and potential drawbacks with each of these options – and there isn’t one particular alternative that is right for everyone across the board. So, it makes sense to consider the pros and cons of paying cash or taking on a new mortgage before moving forward with the purchase of a new residence.
Because a home is typically the largest purchase most people will ever make, it is just simply not possible for many to write a check for the entire transaction. So, borrowing could mean the difference between buying a new home or not buying at all.
There can be other benefits to borrowing, though, too, such as:
- Tax deduction on the mortgage interest
- More cash still available to you for emergencies and/or other potential needs
If you do opt to go the route of paying cash for a home, however, there could also be some nice incentives, like:
- No monthly mortgage payment
- 100% equity in the property immediately
- Larger “return” on the value of the property (i.e., increase in value does not have to factor in – or be reduced by – the balance that is remaining on the mortgage loan)
In any case, now could be a great time to find the home of your dreams – and possibly even be settled in before the upcoming 2021 holiday season. With that in mind, if you’re ready to find a new place to call your own, and your goal is to receive top dollar for your current property, contact us today and we’ll help you put a plan in motion.