I have been thinking deeply about debt and finances off and on over the last couple months. I find it an interesting topic, but I am certaintly by no means an expert in it.
Today, I had lunch with a co-worker who is from India. We discussed how buying a home in India is drastically different that in America. In India, getting a mortgage through a bank is underheard of. If you can't afford a house, then you save money until you can. Maybe you could even convince some friends or family to loan you some money, but the bank doesn't get involved. You can even pay your lifetime of property taxes all at once. Just that simple.
In the US, it is the opposite. My friend just couldn't understand why you would agree to pay almost all of the mortgage payment on interest, pmi, and property taxes (in escrow) while only making a small dent in the principle. I must admit that I just hadn't thought about how crazy it sounds because it is standard operating procedure to get a mortgage when buying a home in the US. The banks certainly like the way it is set up as you end up buying your house several times over if you take 30 years to pay down your mortgage or better yet that you upgrade your house every couple years.
He did, however, did see the value in me continuing to rent my house in Houston while we lived abroad as at least someone else was paying the bank. I often wonder if keeping the house and renting it out was a smart move. I hope I don't regret not selling it down the road. Time will tell. At least I am working towards increasing my assets...
Today's conversation renewed my conviction to work towards truly owning my own home and enjoying the peace and security that that brings to those so fortunant to achieve it.
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