Mortgages Are Great Assets! by Peter Dellane

No one wants to be in debt, so when it comes to owning a home, people want to pay off mortgages and be "free and clear," but this is not necessarily the best scenario. In fact, having a big mortgage can actually be a huge asset. The value of a home will shift regardless of the amount of money you have in home equity. For this reason, all of that equity is really just sitting in your home without collecting any interest. If you had no equity, but invested the money elsewhere while having a huge mortgage, the appreciation of the home would still make you money, while all of that cash would collect interest at the very least. If you use credit cards or have any other loans, you are paying a huge percentage to borrow that money. It is much more economically beneficial to borrow money against your home equity. If you have outstanding debts, pay them off using your equity because even at an 8 percent interest rate on a mortgage, the government subsidizes one third of the interest on your mortgage, lowing that to 5.4 percent. Who wouldn't rather pay 5.4 in interest on their loan versus 20% or even more? There is no reason to leave all of that equity in your home. If you have paid off a home, or have a great deal of equity, take the money out now rather than waiting until it is needed. If you use that equity to invest in other endeavors or simply let it collect interest, you will still have the home and make regular mortgage payments. However, if a crisis arose or you suddenly needed the money, the only option would be to sell the home. This would simple give you back what you put into the home along with the appreciation, and if it is rushed, you might not get the best price. The worst part about this is that you lose the home. If you take the money out of the home beforehand, you can make interest on it or use it, while still securing the home with a monthly payment. Don't forget, you will still be making money on the appreciation of the home if and when you decide to sell. Taxes are another great reason to keep a big mortgage. If you pay cash for a home or put down a sizable down payment, you are not paying interest on that purchase and therefore the interest is not tax deductible. Also, only the first $100K will be tax deductible if you decide to take out a home equity loan. However, if ninety percent of the home purchase was mortgaged, the entire amount would be deductible. If you then have the cash to pay of the mortgage, you can always return to a home equity loan. Though mortgages and debt might seem dangerous to some, they are actually the best way of borrowing money. It is amazing how no one seems to be very scared of credit cards, while the interest rates are absolutely outrageous. Borrowing money through a mortgage is a great investments and is almost always much more secure.

About the Author
About the Author: Peter Dellane is the President of Ability Mortgage Group, LLC, a leading provider of the great Maryland Mortgage rates and low costs zero point mortgages. For more information on the bestmortgage loans Maryland has to offer, please visit www.marylandsmortgage.com.