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The Benefits of Mortgage



In the past few years, buying a house or a property will allow you to give at least half of the exact amount as down payment for the property you want to own and the tendency is, your loan  due reaches 5 years. But today, FHA is now offering a 30 year loan that requires 3% down payment. This FHA loans have resulted into a mortgage that soon became a commonplace. According to the recent census, almost two-thirds of the household have mortgage and some of the mortgage-free houses are owned by the senior citizens.



Many say that mortgage is providing lots of benefits especially for the homebuyers, and it is indeed true. The following are the benefits of mortgage:


  • Leverage – This is considered as the chief advantage of mortgage, why? For instance you bought a home that is worth $500, 000 with a down payment of $100,000 and a loan of $400,000, your home will gain 10% within one year, and so for this, you have gained 50% profit from your investment. Leverage will allow you to get back and make cash off the mortgage bank to you. This will increase the appreciate rate for about 5 times.


  • Investment Opportunity – No can determine how valuable opportunity is however it is for sure real. What is a business opportunity come to you in the middle of the night, are you going to grab that opportunity when your money is already gone because of paying your mortgage property without mortgage? In this case, you will be able to save lots of money through avoiding the mortgage interest however; this might fail compared to what you have made in your previous business venture.


  • Security – You can get security when you are paying off all your mortgage and you are also secured if you have saved your money in a bank because instead of paying cash, you have mortgage in your property. For instance an earthquake had occurred and your house was damaged, you can make use of your insurance in order to rebuild your house, assuming that you acquired for earthquake insurance.


  • Interest Deduction – If you have mortgage in your home, the interest that you pay for your mortgage is already deductible but with definite time. The deduction value will greatly depend on the interest and tax bracket. Like for example, you have yearly mortgage interest payment amounting from $30,000 and you are in 28% tax bracket, the deductions will amount to $8, 400.


Those are just few of the benefits that you can get on mortgage. Whenever you meet problem due to natural disaster, you will not find any difficulty in rebuilding your house because you are insured of insurance. You can make use of your insurance to improve your home again and start a new life. Also, when it comes to paying your mortgage, you will be given discounts or deduction on the interest depending on how you pay your mortgage property. Mortgage will be very helpful in uplifting your economic status but make sure to use it properly.

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