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Are you considering getting a mortgage loan? Let us make things easier for you and get your head clear on mortgage loan benefits:

Leverage

One of the chief advantages of a mortgage is the resulting leverage. Leverage allows you to make money off the bank’s mortgage to you. It typically increases the effective appreciate rate by up to five times.

Security

While there is a certain sense of security that comes from paying off your mortgage, there is security too in having cash in the bank because you have a mortgage on your home instead of paying all cash. If an earthquake strikes, your insurance will eventually help you rebuild your home, assuming you have earthquake insurance. But what about all the costs you will incur in the meantime? What if another emergency comes up at the same time? With a mortgage, the bank bears the lion’s share of the risk to your home and, if catastrophe strikes, you are able to walk away with money in the bank.

Investment Opportunity

The value of opportunity may be difficult to define but it is certainly real. If a once-in-a-lifetime business opportunity arises overnight, would you be able to take advantage of it if your money has gone to pay off your mortgage or purchase a property without a mortgage? You might be saving a great deal of money by avoiding mortgage interest but that might pale in comparison to what you could make in a business venture.

Mortgage Interest Deduction

The interest paid on your home mortgage is deductible, up to certain limits, on your tax return. The value of the deduction depends on the amount of interest and your tax bracket.

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