Buying your first home in cash: advantages
The first condition for buying a house by paying in cash is obviously financial availability : you need to have a lot of money aside or you must be able to count on a loan from a family member (parents or grandparents).
Being able to choose it, this solution is advantageous because it avoids having debt with the bank for many years https://www.dignityproperties.com/
Furthermore, paying for the house in cash has lower costs – compared to a mortgage – because you do not have to pay interest to the bank and fees and taxes to the notary and the State. So, in fact, the house costs less than buying with a mortgage.
Buying a first home with a mortgage: advantages
One of the main advantages of buying your first home with a mortgage concerns tax deductions . In particular, you will be able to enjoy this advantage:
substitute tax , which includes a series of tax charges that no longer have to be paid individually (mortgage and cadastral taxes, registration tax, stamp duty, taxes on government concessions), equal to 0.25% of the financed amount , instead of 2% .
Furthermore, although in this case we cannot speak of a real advantage, there is the possibility of deducting the interest expense of the loan to the extent of 19% to be considered . The interest expense can be deducted; the expenses of the preliminary examination and assessment; the notary payments for the loan authorization; the alternative tax; the intermediation costs expected by credit organizations; surcharges for the enrollment or revocation of a mortgage; the valuation allotments conditional on indexation sentences. All within an ultimate roof of thousand’sp euros (from that few hundreds euros are recovered).
From the point of view of the management of the family economy, although the mortgage obliges you to organize family expenses in the best possible way, it also allows you not to affect any savings accumulated to manage unexpected expenses.
Finally, if something big happens, it can become difficult to pay the debt back to the bank. For this reason, it is always advisable to insure the mortgage : it is an extra cost, but one that allows you to deal with this commitment to the bank more serenely. Mortgage insurance is a specific product with decreasing capital.