Arraya, I TOTALLY disagree with you. Your thinking is archaic to me.
I can assure you that I don’t need an explanation from anyone on the advantage of paying principal
So little principal is paid in the beginning, I advise taking the I/O loan and stashing the difference in the bank.
Don’t worry about a yield return that beats the mortgage rate OR justification.
Yes property does go down. You already bought it.
Owing a bit less doesn’t change that.
I’d rather have a client with $10,000-$20,000 CASH in the bank, safe and secure instead of lowering their loan balance by $20K.. There are other factors to consider, which I CLEARLY explain to my clients.
In a few years, they can always pay down the balance IF they choose. I also NEVER tell people that their house will be worth more someday.
I can guarantee you one thing, I never lost any sleep by having a liquid cushion of cash in the bank, regardless of my mortgage balances.
I have clients that did what you say to do, and they have some “equity” but they cannot get to it for various reasons, and they need it.
Up market/ Down market is doesn’t matter. I’ve studied this stuff 7 ways from Sunday. You owe what you owe and the house is worth what it’s worth. Too many people are going to owe a little bit less on their mortgage, but have no cash in the bank. It’s NOT a good thing.
Many people are also a slave to their mortgage and will die with a house that’s paid off. Yipee for them.
