If you’re looking into buying a house, then the chances are that you’ll need to take out a mortgage. Taking out a mortgage is the only way to get enough money for such an expensive purchase; it usually requires 10% down, and this down payment often needs to come from the buyer. Thankfully, there are more than a few reasons why getting a mortgage can be beneficial!
The main benefit of getting a mortgage is that it creates an instant sense of responsibility in the borrowers. When all they needed was some collateral and their signature, many people didn’t feel like they had strong ties to where they lived or what they owned (perhaps because everything was rented). Getting a mortgage changes that: suddenly, you owe someone else money, and they’re not just going to let you go without consequence. This sense of responsibility, especially when combined with the borrower’s own hard work, can often lead to a greater sense of community involvement and pride in one’s home.
Mortgages also tend to come with a number of tax benefits. The interest that you pay on your mortgage is often tax-deductible, which can save you quite a bit of money over the life of the loan. In addition, many mortgages offer lower interest rates than other types of loans – sometimes as low as 3%. This means that you’ll end up paying less for your house in the long run, which is an amazing benefit!
Finally, mortgages are often much more flexible than other types of loans. You can change the due date of your mortgage whenever you feel like it, and you’ll only incur a small fee – on some mortgages, this fee’s so small that it might not even be worth mentioning! You can also often skip a payment or two if you need to, which doesn’t work for other types of loans.
1) Put extra money towards the principal debt to pay off your mortgage sooner
2) Invest the money you would have used for mortgage payments and let the interest compound
3) Take a vacation! Mortgage payments can be stressful, so take some time to relax and enjoy your hard-earned money.
4) Pay down other high-interest debt with the money you’ve saved from your mortgage
5) Use a mortgage to renovate your home or buy some new furniture – mortgages often come with low-interest rates on home equity lines of credit, so you can borrow without having to worry about getting approved.
6) Consider bad credit mortgages to improve your credit score by ensuring you pay each instalment on time. The benefit will show in the long run.
7) Use a mortgage to purchase real estate – your tenants will cover your payments.
Getting a mortgage is a great idea for anyone considering buying a house. Though they’re usually more restrictive than other types of loans, they come with many benefits that make them worthwhile for most borrowers – especially those who are responsible enough to handle them!
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.