Historic southern style homes in Charleston, South Carolina with fall colors.
What is the difference between a house and a home? A house is a structure or a shelter to protect one from the weather and a place of safety. A home is about experiences one receives living in the house, a warm environment where memories are made.
The choice of whether you should finance or pay cash when purchasing your residence (assuming you have the cash) is determined on the merits of making your cash efficient and not the emotional experiences or memories the home instills.
Facts about the equity in your house:
• The equity in your house benefits the lender while equity other than in your house benefits you the borrower.
• Zero interest is earned on the equity of your house.
• If you have enough cash in a side fund to pay-off your mortgage with a stroke of a pen, the mortgage is not a debt – just a financial obligation.
• A 30 year fixed mortgage guarantees a fixed payment independent from inflation’s impact.
• The first mortgage payment is the most expensive. The last payment is the least expensive. Inflation is what reduces the value of future payments and is the lenders risk not yours.