Anytime you use borrowed money to make an investment, you are using leverage. In the case of buying a home, you probably have little choice other than to get a mortgage loan. Very few can afford to buy a home with all cash. However, even if you did have that much cash, you might still want to borrow money to cover part of the purchase.

For one thing, you might not want to tie up a large part of your cash in property. By borrowing, you can keep those funds available for emergencies or to take advantage of good investments as they appear. You are better able to spread your funds among many investments, so that you are not so dependent on the success of each one. More->