Why get a mortgage rather than pay cash when buying property?
For many people, mortgages are a burden, but if you’re fortunate enough to be an individual of high net worth (HNW) they are often an opportunity. In this piece, we look at the advantages of opting for a bespoke mortgage rather than a cash purchase of a property.
We also discuss the best ways of assessing your mortgage options, particularly if you have a complex income – we are specialists in dealing with complex income structures.
The advantages of opting for a mortgage
By choosing a mortgage, especially at a time where rates are at near historic lows, you can benefit from greater liquidity. This will allow you to take advantage of other investment opportunities, not just property, but equities or other asset classes.
It may also be that you don’t have cash available – or would rather not sell other assets to generate the necessary funds. The right time to buy property may not be the best time to sell equities to fund the purchase.
Further benefits can be derived from longer-term fixed mortgages as they can function as a hedge against future rate inflation. There may also be tax benefits from taking out a mortgage – to reduce inheritance tax, for example.
“Henry Dannell are experts at working through complicated and nuanced mortgage cases and I was able to buy my current flat thanks to them.”
The benefits of cash
Paying with cash does have its advantages, of course. For example, you can move on a deal quickly – this may also help you secure a lower purchase price.
With certain investment properties, you may be unable to secure a mortgage – if there are structural issues, or short leases, for instance. This is where the real benefit of a cash purchase comes in, particularly, if it is an investment opportunity too good to miss. (That said, we can often secure good mortgage deals for ‘difficult’ properties.)
Complex income mortgages – talk to the experts
The HNW individuals we assist include solicitors, barristers and other legal specialists, as well as finance professionals such as private equity and hedge fund managers, commodity brokers and investment bankers. Others include sports and entertainment professionals.
One thing these diverse professionals tend to have in common is that they have complex incomes – income generated in several different ways and received via various corporate entities or by other means. Henry Dannell specialises in providing innovative solutions for these types of clients. In particular, we can advise on and find the best-priced and most suitable solution for your mortgage requirements.
For a free initial consultation, please call 0204 5999 444 or email firstname.lastname@example.org
Please note: a mortgage is secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. Please also note: The Financial Conduct Authority does not regulate most forms of buy to let mortgage.