Is Mortgage Debt “Good”?

by equity design

“Mortgage. Yikes!  It is hard to imagine looking at my credit report and seeing a six-figure line item.  That is six-figures that I need to pay back.  Sure I have had school loans in the thousands and some credit card debt but this, this is something totally different. Is mortgage debt good?” We would like to pretend that there is an easy answer to this question but there is not.  Even though we do work in mortgage banking we have to admit that from one perspective the answer to this question is:  “No, mortgage debt is not good.”  Debt is debt.  And mortgage debt is just one more elaborate scheme to siphon money away from the middle class into the hands of the ultra-rich.  I wish I could spin it another way but that is the reality. On the other hand, mortgage debt can still be very good in the right hands:  someone who is responsible, wisely counseled and prepared to understand the place a mortgage plays in an overall life plan.  How is it good, you ask: ¨      A mortgage is some of the cheapest money to borrow.  Right now rates are down as low as 5% on a long-term, secure, fixed note. ¨      A mortgage helps us build our financial future by helping us secured a significant asset.  By paying for our home instead of a landlord’s home we are slowly growing our financial autonomy. ¨      On top of the reasonable interest rate you also get the opportunity for a potentially massive tax write-off.  Much of the interest that we pay on our mortgage is “returned” to us in the form of tax write-offs.  Talk to a tax professional for the specifics in your situation. Good and not good.  Please seek trustworthy counsel with all your debt-management decisions.

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You’re currently reading “Is Mortgage Debt “Good”?,” an entry on Equity Design.

Author:
equity design
Published:
9am on 02/26/09
Category:
Coaching, Debt, Financial Health, Mortgage, Taxes

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