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Most people think of a mortgage as a burden.
A debt to be paid off as quickly as possible.Warren Buffettsees it differently.
And his reasoning is worth understanding in any rate environment.
The Berkshire Hathaway chairman has been making the same argument for decades.
He believes the 30-year fixed mortgage is one of the most advantageous financial instruments available to ordinary homebuyers.
"One of the reasons a home is a terrific buy is because of the 30-year mortgage," Buffett said, according toBenzinga.
"A 30-year mortgage is the best instrument in the world.
Because if you're wrong and rates go to 2%, which I don't think they will, you pay it off.
It is an incredibly attractive instrument for the homeowner and you've got a one-way bet," Buffett said.
One of Warren Buffett’s dividend stocks is key to reopening Strait of Hormuz Greg Abel sends Berkshire investors a powerful new signal Warren Buffett’s Berkshire warns Americans on housing market The logic is structural.
If rates fall later, the loan can be refinanced into a lower rate.
If rates rise, the original rate stays intact.
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