You’re buying a home not only to find a place to live, but to build the value of your assets. If you knew it would decrease in value – you most likely wouldn’t buy it. Buying a home directly is like keeping money trapped in a piggy bank. Home values fluctuate with or without mortgage. It is better to get a long-term mortgage to allow equity to grow along with the value of your home.
Everyone wants to build equity, which is why numerous families choose to own a house. The equity can present long-term savings benefits for colleges, investing in major purchases, and even planning for retirement. By making your monthly payments, your equity continues to grow. Paying off your mortgage faster helps the equity grow at a faster pace as well.
Over the next 20 years, a home can see substantial growth in value. The expansion in equity can be profound even if your principal balance remains the same.
In general, mortgage is essentially easy money. By demonstrating your ability to repay mortgages, you pay less interest and build equity comfortably.