THE SITUATION:
A couple was purchasing their first home—a spacious single-family house intended for multiple generations, including their children and parents. In keeping with cultural norms, they planned to pay all-cash. Their real estate agents were thrilled!
THE HIDDEN RISK:
Fortunately, their financial advisor raised a red flag. Paying all-cash would deplete their liquid assets and jeopardize future plans—renovations, college tuition, and other financial goals. He urged them to consider financing part of the purchase.
THE PRESSURE:
When the buyers told their agents they were now considering a mortgage, the agents panicked. The deal had been negotiated as a cash purchase, and they feared the seller might balk. Feeling pressured, the buyers backed down—thinking they could always refinance later if needed.
THE COSTLY MISCONCEPTION:
Their financial advisor stepped in again, explaining a critical detail: only acquisition debt is tax-deductible. If they purchased all-cash and refinanced later, the mortgage interest would not be fully deductible—except for the first $100,000. That’s when they were referred to me.
THE SOLUTION:
I confirmed the advisor’s concerns and introduced a strategic workaround: Delayed Purchase Financing. If they applied for a mortgage within 90 days of closing, the IRS would treat it as acquisition debt—making the interest fully deductible.
We prepared in advance, closed the home all-cash, and applied for the mortgage the following week. Everything went smoothly, and we closed within 30 days.
THE REAL LESSON:
Too often, buyers make major financial decisions without considering long-term consequences—or consulting the right professionals. Real estate agents rarely ask the deeper financial questions. That’s why working with a Certified Mortgage Planning Specialist® who understands both mortgage strategy and financial planning is essential. Smart mortgage decisions today can protect your financial future tomorrow!
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Warren Goldberg is President of Mortgage Wealth Advisors, a Certified Mortgage Planning Specialist®, and a published author. His interviews include Blog-Talk Radio, Newsday, The Daily News, Anton Press, and the Long Island Herald. Since 1992, he’s been sharing his financial knowledge and wealth-building strategies, including how to properly use your mortgage as a financial tool. His clients regularly express their trust and appreciation by recommending friends and family call when in need of mortgage, real estate, and financial guidance.
#DelayedFinancing, #MortgageWealthAdvisors, #AllCashHomePurchase
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