Even Warren Buffett Has A Mortgage
CNBC just had a great article on “Why One of the world’s richest people took out a mortgage.”
“When I bought it for $150,000, I borrowed some money from Great Western Savings and Loans. So I probably only had $30,000 of equity in it or something like that – it’s the only mortgage I’ve had for fifty years,” Buffett said.
He added, “I thought I could probably do better with the money than have it be an all equity purchase of the house.”
There is good debt and bad debt and a mortgage is good debt. It’s one of the few investments where you can use good leverage. In addition to looking to get a better return on your money with rates so low today, it’s also a great idea to put as little down as you need so that you have money leftover in reserves as most advisors recommend having at least 6 months of reserves for all of your bills. Your house is not liquid and you never want too much money tied up in any one asset.