Cash vs Mortgage – Which is a better choice when buying a home in Dubai.

Buying a house is an important decision to make. Investing in a property is a lifetime asset that can be beneficial for you in many ways. You can save so much money on rent by owning your own house. There are two ways to buy a house, through cash payment or mortgage. In the UAE you can choose either way to invest in your dream home. The line between which is better than the other solely depends on why you want to invest, and how you want to manage your financials while investing in the property. Both cash and mortgage have their own advantages and disadvantages depending on your plan and investment options.

Let us take a look at the advantages of cash and mortgage payments.

Advantages of buying a house with cash

Less expensive

Buying a house with cash is less expensive compared to buying it through a mortgage. Through savings, you buy the property. Mortgage prices for property investments are generally high with added expenses and interest rates. Chances are that you might have spent more than the original property price when you choose to buy the property through a mortgage.

Can negotiate

When you choose to buy your house with cash you have the power to negotiate with the owner according to your budget. You can choose properties that align with your savings and then choose to make an offer. Whereas with mortgage payments you don’t have the option of negotiating much.

Less time consuming

Buying properties with cash payments are hassle-free. The transaction is simple and direct with the relevant documents. On the other hand, choosing to buy the house through a mortgage is time-consuming, you have to deal with banks, and other documentation before you can transfer the property to your name.

Advantages of buying a house with a mortgage

Flexibility

There are different kinds of mortgages in Dubai, UAE. When choosing to buy a house through a mortgage you have the option to select from the many kinds. Compared to cash payments, mortgage payments provide a sort of flexibility when investing in properties.

Manageable

Saving a huge sum of money over the years can limit many other financial opportunities for you. Saving up for a house and paying through cash can be a little difficult for you when you have other expenses and emergency financial situations to attend to. And saving for a house can take longer than you plan. But on the other hand, paying through a mortgage and investing in a house with a mortgage option is much easier and manageable compared to cash payments. This is one reason why many expat use mortgage payments when investing in properties in Dubai and the UAE.

Liquidity  

When you choose to buy a property through mortgage options, you have greater liquidity. Whether you have an emergency travel trip or any other financial situation, you will have the finance to sort it out. On the other hand, if you invested all your cash savings into purchasing the property then you will be left with nothing.