Advantages of Having a Mortgage

There is good and bad debt. Bad debt is credit-card debt resulting from making purchases that allow you to live beyond your means, though at a steep price. That price is being saddled with debt that can decades to pay-off making your $500 television actually cost you upwards of $1000. The worst part about bad debt is that the interest is not tax-deductible.

On the other hand there is good debt or debt that makes sense. It has a fixed interest-rate and a set number of payments. This type of debt includes a car loan as a vehicle is critical for many Americans to get to work. Another type of good debt is student loans. For most people a better education will typically lead to better and higher paying jobs. The only draw-back is that this debt is not tax-deductible.

The best debt of all is mortgage debt with a fixed rate. There are many reasons that mortgage debt is the best debt in addition to the fact that for most Americans mortgage debt is one of the only remaining tax-deductions on your federal income taxes. Here are a few more advantages of having a mortgage or the best kind of debt.

The most self-evident one is that you actually own the home in which you live. It’s yours and you can decorate, renovate it, paint it pretty much as you see fit. Studies all show that children of parents that own homes tend to do better in school with higher-grades than those that grow up in rental units.. What a great reason to have a mortgage – knowing it will help your children do better in life.

When you own a home you are building equity as when you rent once you write that check the money is gone forever. Owning a home even in today’s market is an important piece of building long-term wealth. Once the mortgage is paid all you have to pay is the insurance and taxes which will be much less than continuing to pay rent for eternity.

As noted in the most recent addition of Realty Times if you have a fixed rate mortgage you know how much your mortgage payment will be every month as opposed to renting when at the end of a lease term the rent can go higher.

Finally there is pride of ownership – when you own a home you just feel better about yourself – you’ve achieved the American Dream!

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