If you have to take out a mortgage for your home, don’t fret! You don’t have to hate this new monthly payment; in fact, you should come to love it because your mortgage will end up being the cheapest way for you to borrow while owning your very own shelter. No one loves having debt, but a mortgage is one of the less stressful elements for you to worry about.
Here are a few reasons you’ll learn to love the mortgage that you have.
- It helps you build credit. As with every loan that you take out (and hopefully pay on time), you’ll be build up your credit score. And not only that, but most creditors see a mortgage as “good” debt versus a bad debt that might end up hurting your credit score in the end. Creditors see mortgages as good because if you can maintain mortgage payments in addition to other debt and loans, then you’ll look like a more responsible credit user.
- There’s a low interest rate. And in fact, it’s one of the lowest interest rate loans that you can possibly obtain. It’s also one of the safest types of loans that you can take out in your lifespan.
- It’s a cheap way to build up your bank account. Because these loans have low interest rates and are generally a low risk, you don’t have to worry as much about these loans as you might with another type of loan. Additionally, you can actually make more money if you have an investment opportunity where you might be able to make more than 4% of an increase because you can finance it with your mortgage and make money there.
- You’ll get some tax benefits. The interest on your mortgage is tax deductible because the government wants to help encourage you within your home ownership goals. It’ll also make your mortage less expensive each month.
- You can rely on it as an emergency fund. In case of an emergency or a situation where you need money quick, then you can use the 4% investment opportunity to help you make some money in a pinch.
- Retire with your mortgage money. A reverse mortgage is something that a lot of people use with their mortgages, which we see among retirees who are in some financial trouble. You can take a mortgage against your home that will let you get paid by the lending company instead.
Image via flickr/stockmonkeys.com
