Fixed Rate Mortgage &
How It Can Make You Rich
Homeowners have an average net worth that is 40x that of renters but the question is “Why?” Homeowners have an average net worth of over $250,000 versus only $6,300 for renters not because they’re better savers, it’s because of the fixed rate mortgage.
The fixed rate mortgage is the most powerful investment tool in the universe because it helps you build wealth in three ways:
1) You benefit from price appreciation that comes from inflation. Also, assuming you invest 20% down, 10% appreciation actually turns into a 50% gain in your money.
2) You benefit from principal reduction, which is like a forced savings account for every mortgage payment that you make.
3) You benefit from tax savings on primary residences and also investment homes.
The added bonus is that you lock in your payment, whereas rents continue to rise every year with inflation. This is another reason why investors like investing in real estate, because their payment stays flat and they're able to increase their cash flow over time as rents rise.
What questions do you have on generating additional wealth through real estate for you and your family? Add your comments below or contact us
Posted by Matt Curtis on