Buying a Home With Mortgage vs. Cash – 4 Reasons Why Mortgages Always Win Conclusion

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When talking about expensive lifestyle purchases for an average Joe, weddings, housing, and education costs are a significant part of the equation. While we will talk about education and weddings in another post, this article is about all the reasons taking out a home mortgage from credit unions could be a better reason than buying a home with liquid cash.

You may have received a massive lump sum amount by selling another property and thinking about avoiding the hassle of mortgages. But you will be surprised to learn how mortgages can be lifesavers in the long run. Don’t believe us? These reasons will convince you!


Mortgages Help You With Your Financial Stability

When you buy a house with cash, you are subject to market fluctuations. The value of your home could go down, and you may not be able to resell it at the same price that you bought it for. A mortgage will help you lock in a fixed interest rate, which will give you stability and security for your home. If you do have to resell your house, you will get back what you paid for it, plus any interest you have accrued.

You Could Become Eligible For Tax Deductions

This could save you a lot of money in taxes, which can be used to pay off the mortgage or other expenses.

You need to know a few things to be eligible for tax deductions with home mortgages. First, you need to itemize your deductions instead of the standard deduction. This could mean that you have to keep track of many different expenses, but it could be worth it in the long run.

You also need to ensure that your mortgage is for your primary residence. This means that you can’t deduct the interest on a second home or an investment property.

You Can Spread Your Payments Over A Longer Timeframe

You don’t have to pay hefty amounts every month towards your home mortgage, compromising on your quality of life. That’s the best part of taking a home mortgage. You will feel like you don’t have a financial obligation at all. Of course, this holds true only when you pay your EMIs on time. So, make sure you keep the EMI amount aside every month when you receive your salary. Don’t fall into the trap of “I’ll do this later” because later never comes!

It Will Force You to Save More

When you have a fixed goal to achieve, it helps you systematically save money. You won’t spend frivolously because most of your income will go towards the mortgage. This is a good thing in the long run because you will learn the art of saving money – a skill not many people have!

Mortgages Help to Build Equity

A mortgage is a secured loan, which means your house is the collateral. This allows you to build equity in your home. Equity is the portion of your home that you own outright. It’s the difference between what your home is worth and how much you still owe on your mortgage.

You Can Get a Lower Interest Rate

When you have good credit, you can get a lower interest rate, which will help you save money in the long run. The difference may not seem like much at first, but it adds up over time.

You Can Use the Mortgage as a Leverage

This means that you can borrow money against your home equity to make other investments. For example, you can use a home equity line of credit (HELOC) to start a business or invest in real estate.

You Can Get Mortgage Insurance

If you’re worried about defaulting on your loan, you can get mortgage insurance. This type of insurance will cover your mortgage payments if you lose your job or become disabled.

Bonus Tip: Understand Your Mortgage Payment Before Getting One

When you take out a mortgage, you borrow money from the bank to buy your home. The bank will lend you a certain percentage of the home’s total value, and you will be required to pay back the loan over a set period.

As you make monthly payments, part of that payment will go towards the interest on the loan, and part will go towards the principal. The interest payments make up the bulk of your monthly payment for the first few years of the loan.

After you have paid the interest is when your principal deductions will start. Make sure you check the interest rates, the tenure, and any hidden costs involved before signing off on your mortgage note.



Mortgages are always better than buying a home with cash because they help you spread out your payments. Make the right call by taking cues from the above tips and get yourself a home mortgage.

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