Why purchase with a mortgage (even if you don't need to)?

We get it. Paying cash for a home means you won't have to pay interest on a loan and any closing costs and paying off your mortgage (or not having one) can make you breathe a bit easier. Also, investing in other places like the stock market could leave you in a better financial position than paying off your mortgage.

However...

Obtaining financing can have significant benefits. Even if a buyer has the ability to pay cash for a home, it might not make sense to use all of your cash to buy your house. That could limit your options if other needs come up. Purchasing a house with a mortgage can provide several benefits, including:

Homeownership: A mortgage allows you to own a home, which is a long-term investment that can build equity and potentially increase in value over time.

Affordability: A mortgage can make it more affordable to purchase a home, as it allows you to spread the cost over several years through monthly payments.

Tax Benefits: Mortgage interest payments may be tax deductible, which can lower the overall cost of homeownership.

Forced Savings: A mortgage payment forces you to save a set amount of money each month, helping you build equity in your home.

Just in Case: If the home turns out to need serious repairs, it may be difficult to get a home equity loan to fix them after the fact, as you don't know what your credit score will look like, how much the home will then be worth, or other factors that determine approval for financing.

In the end, it's important to carefully consider your financial situation and the responsibilities of homeownership before deciding to purchase a home with a mortgage. Cash buyers need to be sure to leave themselves plenty of room for unexpected expenses. By opting to go with a loan, you can give yourself more financial flexibility. Using a mortgage calculator is a good resource to budget some of the costs.