We work with high-net worth individuals all the time, who have the ability to buy a luxury home with cash but are wondering if that’s to their advantage.
When purchasing a high-end property, many buyers consider paying cash to streamline the process, but even if you have the liquidity, financing a luxury home can offer significant tax advantages and financial flexibility, especially when you have access to the right lending options.
Here’s why financing may be the smarter long-term move.
Mortgage Interest May Be Tax Deductible
One of the biggest perks of financing is the potential to deduct mortgage interest from your taxable income. Currently, interest on up to $750,000 of qualified mortgage debt is deductible if you itemize on your tax return. For high-net-worth buyers, this can translate into substantial annual savings. Talk with your tax professional to see if this might be to your advantage because buying cash may mean ultimately paying more at tax time.
Preserve Liquidity and Keep Capital Working
When you finance, you don’t lock up millions into a single property, but instead you preserve your liquidity. Financing allows you to keep investing cash in higher-return opportunities, often yielding far more than you’re paying in interest. This also allows you to keep a diverse and liquid portfolio that acts as a hedge against shifting market conditions, and frees up funds for other ventures or tax-planning strategies
The approach lets your money work smarter, not just sit in your home.
More Control for Estate Planning
Every major financial decision you make should include a consideration of your future needs (and the ways you can benefit your heirs). Carrying a mortgage can help lower the taxable value of your estate, preserve liquid assets for your heirs, and maintain flexibility in how your wealth is transferred.
In many cases, a financed property will grow more over time than the interest you’ve paid to finance it. On top of that, you are likely able to grow the cash you would have spent on it in a more significant way by looking at other ventures. Thinking long term, decades down the road, this may be the best move for your estate.
The Power of Specialized Luxury Financing
The key is working with a lending team who understands your point of view and your goals, and can guide you toward the right specialized financing option. We specialize in lending solutions designed for high-net-worth and self-employed individuals. Some of the financing options we offer include:
Jumbo Loans
For home purchases that exceed conventional loan limits, jumbo loans provide the flexibility and scale needed to purchase luxury properties—often with competitive rates and tailored terms.
We offer:
-
Up to $1.5M at 90% LTV
-
Up to $3M at 75% LTV
-
Up to $5M at 65% LTV
-
Up to $7M at 60% LTV
-
Up to $8M at 50% LTV
Bank Statement Loans
Perfect for self-employed buyers, bank statement loans allow you to qualify based on your business or personal bank deposits over the past 12–24 months, with no tax returns required. These loans reflect your actual cash flow and make it easier to qualify for the property you want if you’re not a W-2 employee or your net-worth is not fully reflected on your tax return alone.
Asset-Based Financing
With asset-based loans, you can qualify based on your liquid assets (such as investment accounts or retirement funds) rather than traditional income. This is ideal for high-net-worth individuals who have significant wealth but a limited monthly income.
If you want to learn more about these or any of our financing options, contact us any time. We’re here to help whether you’re ready to apply now or simply have some follow up questions.