Buying in cash or financing?

The time has come to buy your dream apartment, but the question still remains: should you buy in cash or finance? The answer to this question depends on a number of factors.

The fundamental step is to understand your situation: is it your first property or is it an exchange? When it's your first property, you have the option of saving up to buy it outright or financing it. If you own a property, you can put it down as a down payment. 

To help you choose the option that best suits your needs, we've listed the advantages of buying a property with cash or financing. Read on!

Advantages of buying property in cash

Many buyers choose the cash option for two reasons. The first is to get rid of interest. The second is to bargain for a good discount. However, you should bear in mind that

• you already have the amount available or you still want to add to it;
• property values fluctuate a lot because of the market conditions;
• you have to have the discipline to save every month.

When you buy a property outright, you pay the real price. This is because financing comes with interest which, when added up, shows a higher total than expected.

And when you buy a property in cash, another advantage is that you can avoid unforeseen circumstances compromising your income and affecting your mortgage payments. Everything is already paid off.

Advantages of financing a property

There are also advantages to financing the property, as it's a great way to get your first apartment. Payment conditions are easy and many credit lines offer benefits.

The first advantage is that raising the money to buy a property outright is a distant reality for some people. That's why financing allows you to choose a line of credit with the most advantageous conditions for your profile.

The installments, for example, are budget-friendly. In addition, it is possible to use the balance of the FGTS (Severance Indemnity Fund) to amortize or pay off the installments.

Those who invest can also bet on real estate financing. Depending on the yield of the investments, the monthly installment, or a large part of it, can be paid with this income.

Third option for owning your own property

There is a third option between buying a property outright and financing, which combines the two. In this, you make a larger down payment and get a smaller residual value to pay monthly, in the short to medium term.

If you don't already have this amount, you can raise it by selling a property you already own or other assets, such as vehicles. You can also check out the possibility of using your FGTS as a down payment. 

So you have the option of buying a property in cash or financing it in the most suitable and intelligent way for your budget. It's the realization of a dream and a an important step towards independence.

Take the opportunity to read the article How can I use my FGTS to buy a property? and see the tips for starting a mortgage.