The advantages of buying a house in cash are well known. From the savings in time and money, to being able to make the transactions much faster, are some of the benefits. But you also have to think about the responsibilities, because the cash payment of your property does not exempt you from them and this is one of the biggest surprises of buyers who buy without the correct information.
It is erroneously thought that buying in cash frees you from compromises. They are part of the reason because they do remove the great weight that represents repaying a mortgage for 30 years, in most cases, there are other things that you cannot eliminate, so let’s review the implications;
Payment of Taxes on the Property
These are as usual and will be according to the value of the property and the place where you live. They vary depending on the other conditions, in some cases, up to the size of the house, the location within the community and the lot size or plot. Although you are paid, you can continue to have tax exemptions on the property if it is your main dwelling, so find out about your rights.
This does not depend on whether or not you have a mortgage. The monthly costs will be the same for you as for any other neighbor who has a loan, and the obligations as well. If they are not paid on time like the other payment obligations that the house has, it could ultimately end in losing the property.
The cash purchases do not require payment of mortgage insurance because there is no mortgage, but it is highly desirable that you have your investment covered against the hurricanes, earthquakes and floods and also against theft. It’s an expense, but it’s the way to protect yourself and the money you’ve paid. Consult your trusted insurance agent and evaluate his or her recommendations.
Important Things You Should Know
In certain cases, you could deduct some expenses as improvements to the property if they are substantial. Check with your accountant what they could apply and what tax relief they could offer your property, if any.
Homes that do not have loans are candidates for small mortgages to resolve family situations such as children’s studies and health problems. It will be easier for a bank to make you a loan based on the value of your home. However, property should never be seen as an option for joyous expenses like travel and superficial affairs. Make sure that if you take money out of it, it is for something needed, and above all, you have ability to pay it.
Another common measure is to make a loan to get a second investment or vacation home. If the value of your property goes up enough, the risk could be worth it if you find an opportunity. Do not make the decision lightly, find out with an expert first such as Dubai real estate developers.