Using a Mortgage Wisely

Most Americans have a home mortgage. The rich often have two. Only the poor can’t take advantage of this ‘good’ debt.

mortgage-real-estateHere are the seven rules:

1. Have a home mortgage

2. Borrow a 30-year fixed rate mortgage

3. Don’t buy down the interest rate by paying points

4. Keep your mortgage debt under 30% of your net worth and under 80% of the value of your home

5. Invest significantly in taxable investments each month

6. Diversify your investments between stable fixed investments and growth stock investments

7. After 8-11 years, pay off your mortgage or refinance depending on interest rates

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