Are you considering buying a house in Italy and don’t know if it’s better to pay in cash or apply for a mortgage? Find out about the different options and their advantages.
When it comes to buying a house in Italy, many wonder whether it is better to use a mortgage or pay in cash. Both options have their advantages and disadvantages, and the choice depends on one’s needs and budget Check here https://www.soldsimpleseattle.com/
In this article we will analyze the pros and cons in detail.
Before starting, however, a clarification is necessary: as is well known, there is a well-defined ceiling on cash in Italy . Buying a house in cash in the true sense of the term is therefore not possible , given that the ceiling for cash is equal to 5,000 euros.
Therefore, those who expect to be able to buy a house paying for it entirely with cash will be disappointed: in fact, this is not a possible operation.
However, you can buy a property without necessarily having to take out a mortgage, using your own money or bank account. Of course, all transactions will need to be traceable . This is what we mean when we talk about buying a house with cash. Having made this necessary clarification, we begin with our analysis.
A mortgage is a long-term loan that allows you to buy a house without having to pay everything right away. In practice, the bank or credit institution disburses a sum of money equal to the value of the property, which must be repaid with interest over the years.
The main advantage of a mortgage is the ability to buy a home without having to pay everything all at once.
Furthermore, the mortgage allows you to benefit from certain tax breaks , such as the deduction of interest expense from income tax. This means that a portion of the interest paid each year can be deducted from your tax return, reducing your tax payable.
However, taking out a mortgage to buy a house also has its cons.
The main disadvantage of the mortgage is that you pay more than the value of the property because of the interest. In addition, the bank requires guarantees to grant the loan, such as the stipulation of a life insurance policy and the presentation of a surety.