By: Jerika P – i-Lead Realty Social Media Manager
Are you considering buying a house with cash instead of applying for a mortgage loan? Here are some cons of paying cash when buying a house, according to Rocket Mortgage.
1. Your funds are locked up in the home
The peace of mind that comes with owning your house altogether is wonderful, but it shouldn’t come at the expense of your financial stability. When you utilize the cash to purchase a home, you invest a sizable percentage of your funds in a somewhat illiquid asset. It’s worthwhile, at the very least, to think about your objectives and whether the money could be used more effectively in another way.
2. Cash buyers are not eligible for mortgage tax deductions
The mortgage interest deduction, which allows homeowners with mortgages to write off interest paid on the first $750,000 of their mortgage and lower their taxable income, may go unclaimed if you itemize your deductions. Obviously, you won’t have this choice if you choose not to get a mortgage.
3. Additional charges still applicable
You might be able to buy a house with cash, but it isn’t always a wise choice. Even if you don’t have a mortgage, you may still be responsible for making regular payments for housing. Property taxes, homeowners insurance, utilities, and, if applicable, homeowners association dues will all still be required.
(Source: Rocket Mortgage)
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