What are the Benefits of a Mortgage?

When buying a home, most people realize the importance of qualifying for a mortgage. After all, they don’t have the cash to make an outright purchase.

Despite the fact that a mortgage is typically necessary, most homeowners dream of the day when this expense is out of their life.

Before you get too far ahead of yourself, consider these three benefits associated with a mortgage:

1. Mortgage Interest Deduction

Did you know that the interest paid on your home mortgage is deductible? If you have not deducted this in the past, be sure to discuss it with your CPA this year. The value of the deduction is based on the amount of interest and your tax bracket.

Once your mortgage is gone, this deduction goes away as well.

2. You are Building Equity

It may be cheaper to rent an apartment or home, but remember this: you are not building equity. Every month you are paying somebody else to live in their property.

With a mortgage, you continue to build equity with each passing month. At some point, once your mortgage is paid off, you will own your home free and clear. In other words, this is one of the best investments you can make.
3. Financial Security

There is no denying the benefits of paying off your mortgage. Primarily, you no longer have to make a monthly payment. However, you don’t want to overlook the financial security associated with having money in the bank.
This leads to an important question: if you have enough cash to payoff your mortgage, does it make good sense to do so?

These are just some of the many benefits of a mortgage. You may look at this as a bad thing, but don’t forget that there is good that can come from this type of loan.