We all hear about the great benefits of having a home mortgage. Banks and many financial advisors and accountants tell clients to keep their home mortgage even during retirement. Let’s dispel some common home mortgage myths.

#1 Owning a Home is Better than Renting

Now I do agree with the statement that owning a home is better than renting a home. However, we need to go a little further in detail to dispel this common myth.

Owing a home is great since you do gain equity and have something to sell later versus renting a home. The myth banks tell us is we "own" our home. In truth the bank “owns” the home. We only are making payment on the home. When you stop making payments on the home the bank will foreclose and take the home away from you. Unfortunately many people have learned this fact over the past five years.

True home ownership is when you no longer owe any amount money on your home. Banks never want you to pay off your house regardless of the balance owed. Banks offer you home equity loans to help keep us in debt. A home equity loan is just a great big credit card with our home as collateral.

Myth #1 of owning a home is busted since you do not "own" your home until the mortgage is paid off.

#2 I Get a Tax Deduction on Interest Paid to Bank

Myth #2 of receiving a tax deduction for interest has to be one the main culprits why people refuse to pay off their home mortgage. I have been with clients who state they do not want to pay off their home mortgage because they would lose their tax deduction.

The tax deduction excuse has to be one of the stupidest comments ever made for not eliminating your house payment. Sorry if I am being a little harsh with the tax deduction myth, but you have to take a hard look at your own finances instead of the banks.

If you believe receiving a tax deduction is one reason why you still need to have a home mortgage then please answer this question: Would you rather have your $800 or $1,500 house payment in your bank account or the bank's bank account?

What is your answer? It better be in my own bank account. Why should you pay your hard earned money to a bank for your home when you have the option to pay off the home mortgage? No one from the bank will punish you if you decide to pay off your house early, so why not?

For far too long banks have duped us into believing losing a tax deduction is a bad thing. Remember banks are in the business to create a profit. Banks make more money by keeping us in debt on our house. You need to start working on a plan to pay extra on your house payment. Figure out how much you need to pay to cut your payoff date in half. For most people you would have to make one to three extra payments a year.

Here is a quick example: Your house payment is $1,200 a month. In this example you would have to start paying $100 to $200 extra each month to pay one or two more payments a year.

#3 NOT Having a Mortgage will Hurt My Credit Score

I have to admit Myth #3 could be partially true. Having a home mortgage can improve your credit score. By having a lower credit score you may not receive the best rate on credit cards or car loans.

With that being said I still point to Myth #2 of not having a house payment at all. Take a minute and think how hard would it be to afford a car payment if you did not owe a single penny on your house? A car payment would be easy to afford and any decent bank would approve you instantly. Of course I am assuming you do save your mortgage payment and pay your bills on time.

Wrap Up

As you can see I am pretty passionate about not owing a single penny on your home mortgage. Banks have taken advantage of people far too long dispensing these myths. Banks are in the debt business. Their main product is debt and their main service is keeping us in debt.

My main product is HOPE. I want to show people how to gain their financial independence and achieve their financial destiny.

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