Your Mortgage Isn't A Bad Thing

When you were talking to home loan lenders about getting your first home mortgage you probably had the idea that you would pay off that debt as quickly as possible, right? Most of us were taught that we want to own our home outright as a form of security. The value of this kind of thinking went out with the Crash of '29 as many of the home lending rules have changed significantly since then. It used to be good advice but now it is based on emotion, and our parent's emotion at that!

Back in the days when the banks could call your home mortgage loan at any time and you would have to come up with the money, not being in debt to them was a big security. The rules have changed since then and if you own your own home or other real estate property it can be to your advantage to have a mortgage.

If you should lose your job and need to borrow against your home property, the bank will not refinance because of your lack of income. You would end up having to sell your home to make ends meet which is the opposite of what you had been trying to do by wanting to own that real estate outright. It's ironic but true. Paying off your mortgage in a hurry isn't the sound advice it used to be and can actually backfire.

Having debt on your real estate property can go against our thinking but if we take that emotion out and look at it financially it can be a great help should we need it.

Rhonda Hoffman

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