A jurist named Edward Coke who died in 1634, explained the Latin roots of the word ‘mortgage’ by deeming the term a pledge of death – the prefix (mort) meaning death and (gage) meaning pledge. However, although a distinguished jurist, Coke espoused this sentiment long before the concept of credit graced the mortgage market. Today, mortgages are accessible to nearly everyone through credit, and below are the multitude of reasons to enter a mortgage agreement.
With extra cautious lending practices on the downfall and the economy on the up shoot, mortgage companies are going to be less stringent about relaying a line of credit to new homeowners.
Although homeownership can be expensive, it can also be immensely profitable. Entering a mortgage agreement through one of the many available mortgage companies can easily facilitate a home’s price increase, and therefore its owner’s profit.
The general rule-of-thumb suggests that interest paid on most mortgages is tax-deductible. Furthermore, interest paid on a mortgage can also be tax-favorable depending on which of the many mortgage companies one chooses to do business with.
Most financial advisors will advise against carrying debt whenever possible, but mortgages are generally viewed as the best kind of debt, because it is most easily leveraged to a homeowner’s benefit.
Mortgages supply debt that is easily leveraged and also offer opportunity for profit at greater rates than other types of debt, including educational and car loan debt.
Mortgage companies will oftentimes allow homeowners to refinance their homes with lower interest rates if the economy indicates that home prices are increasing, and this can generate major financial benefits for homeowners.
Fixed rate mortgages will benefit from impending inflation in the housing market since inflation will increase the average home price as the dollar becomes weaker, making those who purchased their mortgages prior to an inflation onslaught receive greater financial benefits.
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Writer
James O’Connor is a finance and mortgage writer. Information provided by Castle & Cooke Mortgage (NMLS# 1251). James writes for Fusion 360, an advertising agency in Utah. Find him on Google+
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