As you start browsing for a house, you may have enough money on hand to pay for the property in cash. While the idea of living without a monthly payment might seem appealing, there are many reasons why you should consider filling out a loan application anyway. Living without a mortgage comes with its risks, both to your personal credit and your finances as a whole. Here are a few perks of working with a mortgage lender.
You don’t have to buy your dream house.
If you are looking in a competitive real estate market, then you may find that homes are hard to find. In a seller’s market, high-quality homes will receive multiple bids within a few days of listing. This means you don’t have time to visit a home several times to make sure it has your desired amenities.
However, if you decide to take out a home loan, you can set aside money to turn almost any home into a dream home. Focus instead on the location. That way, if you find a house that has a small bathroom or doesn’t have a garage, you can use your existing funds to upgrade these features once you move into it.
You can protect your nest egg.
As a homeowner, you will likely encounter several unplanned expenses. You may need to replace the HVAC system or update the electrical wiring in your home. Outside of your house, unplanned expenses like car repairs and medical bills can deplete your savings if you aren’t careful.
Instead, work with a professional who can help you secure a home loan. For example, Mortgage Broker Point Cook works with buyers to select reasonable down payments that still provide homeowners with enough savings to cover emergencies. With a mortgage, your money stays liquid and doesn’t get tied up in your property assets.
You can create a budget for interior design.
Even if you don’t have to renovate a small bathroom or make adjustments to your new house, a mortgage can still give you an ample budget to improve your interior. Replace an outdated bathtub with a Lux Bath option that turns your bathroom into a spa. All you need are a few essential oils and a bath bomb to create an immersive, relaxing experience. You never have to leave the house to practice self-care.
A mortgage can help you settle into the home you just bought. You can decorate your rooms with new accessories that match modern trends and your own personal style.
Mortgage rates are low.
Mortgage rates remain low, which means it’s cheaper than ever to secure a home loan. If you are worried about paying interest on your house, these rates offer good news. Once you lock in an interest rate, it stays the same throughout the loan term. By completing a loan application now, you can save more money than if you took out a loan once the rates increase again.
It’s better to lock in a lower rate now than to hope that mortgage rates decrease in the future. Plus, if you need cash and have to refinance your home, you could end up paying a higher interest rate than you had hoped to get. This is a matter of choosing the sure bet now instead of hoping that interest rates get better in the future.
Talk to your real estate agent about whether a cash offer really is the best option to buy a residential property. You may be better off financially with a 50 percent down payment and a monthly payment on a home loan. You don’t want to complete the entire process of buying a house only to realize you need to refinance.
