When you are repaying and checking the usually endless checks that characterize your bank visits on a monthly basis, the last thing that will ever come into your mind is the advantage that mortgage has to you. The only thing that is in your mind this time is the pain of repayment. But many individuals do not realize that there are several advantages that come with taking up a mortgage.
Advantages of a mortgage
Offers tax break
Taking up a mortgage is the biggest opportunity that one can have to experience the tax break that is available. It is possible for one to get deductions on the interest that they pay on the mortgage loan. This particular aspect is very important especially in the early years of the loan repayment process when your loan repayments are added up with interest. It gives you the option to purchase points, which can allow you pay some additional part of your loan upfront for you to get a lower tax interest rate, this will make it possible for you to deduct the purchase price.
Helps one build equity
As one continues making loan repayments each month, it is very normal to develop a feeling that your money is disappearing into a bottomless bit. But in the real sense, you are building equity for yourself. Many will ask how? This is through the ownership stake that you have in the house that you are paying for. As your equity is growing, you can use your house as a source of funding by making your home security to secure funding. The prices you pay for either of them can be tax-free.
Pot of gold
Most individuals hope for a pot of gold at the end of the rainbow. Many years from now when you have completed the loan repayment for your home, you will realize that your home is worth more than the money that you invested in purchasing it. As a result, you will own a very valuable asset, which you can sell to make very big profits or you leave for your kids to inherit after you have passed on.
Sign of stability
When you own a home, an act that is made possible by taking up a home mortgage, it is a sign that you are stable and it can bring about some other advantages. If for instance, you will need to secure funding for other reasons, for example, you want to buy a car or another large business investment, the first thing that lenders will look at is if you have or have had a mortgage and you are or have serviced it appropriately. This will be the clearest indication to them that you can handle credit responsibly and hence they will grant you your request without so much scrutiny.