What are the advantages of the real estate loan?
As I explain in this post , buying a house does not mean buying only the property but taking care of all the ancillary costs (such as notary, furniture, condominium expenses, etc.) which can sometimes be quite high and which are often not held. I count. Assuming you have the money available to pay for your entire home and related expenses in cash, it may still be better to borrow money from a bank through a real estate loan . I’ll explain better below:
You avoid the risk of running out of money
The reason lies in the fact that, by taking out a mortgage, you would avoid using all or most of your savings by immobilizing them on the same asset (the house) which is not particularly liquid and cannot be sold “in parts” to raise some sum if should you have a financial emergency or need to access some money quickly https://www.kindhousebuyers.com/wa/yakima/
This is because selling a property, even if it were located in large cities such as Milan and Rome where the real estate market is particularly dynamic, is an activity that takes a few months .. For particular properties that do not have a lot of market it could even take years before concluding a transaction. Consequently, the main risk of buying a house using all or most of your savings is that of not having other resources for any emergencies, future projects such as coping with job loss, getting married, having children or even opening your own business. etc. In this case the interest rate is the cost to pay in exchange for peace of mind , because you would know that you have additional savings in case they were needed.
You can benefit from “leverage” to increase the yield in the event of a sale
The mortgage also has another advantage over paying everything in cash and has to do with the world of investments. What I am about to tell you is only relevant if you are buying your first home and you think it will increase in value over time (and therefore that you would be willing to resell). This is a complex assessment that must take into account the city in which the property is located, the neighborhood, type of property etc.