Why Billionaire Mark Zuckerberg Has A Mortgage


The Mega-Rich Have Mortgages, Too

Facebook founder Mark Zuckerberg is worth $53 billion, according to Forbes.

He did not pay cash for his home.

Zuckerberg and other mega-rich Americans don’t need mortgages to buy homes — so why do they have them?

Home loans come with advantages that can benefit rich people, poor people, and the rest in between.

These are the proven advantages of carrying a mortgage, even if you don’t need one.


Cheap Money

Economists say that every investment or purchase you make comes with an opportunity cost.

Using your savings to buy a house — or making a large downpayment — means you can’t also use it to invest in stocks, buy boats or take trips. Wealthy people tend not to keep a lot of money in their checking accounts, earning virtually nothing.

They didn’t get rich by passing up opportunities to make their money work for them.

If long-term investing in the stock market

ets an average of over 11 percent per year (and it does, according to MarketWatch) why would you take money out of it to buy a house.

Current mortgage rates are under four percent. You could pocket the difference.


Opportunities For Normal People

That’s where mortgages come in. By borrowing instead of paying cash, you can have your house and maintain control over your money as well.

For those who are not ultra-wealthy, the mortgage advantage remains. The typical homeowner may not have the same investment opportunities as Bill Gates (net worth: $78 billion). But opportunity cost applies to anyone with debt, too.

As of this writing, the average credit card interest rate in the U.S. is over 15 percent. So why would you use your cash to buy a home or pre-pay your mortgage balance if you’ve got credit card or other expensive debt? Use your cheap mortgage to buy your house and pay off debt with your cash.

The same logic applies when determining how much to put down on your home purchase.

It might make more sense to go with an 80/10/10 mortgage, putting ten percent downpayment and opening a line of credit for another ten percent, instead of coming up with 20% in cash.

In fact, this is a classic example of when making the “full” 20% downpayment is not in your best interests.

Assume a $100,000 home price, and $10,000 in credit card debt.

You could open a second mortgage at the following terms to buy the home at the following terms.

  • 20-year payoff period
  • 5% interest
  • $66 per month
  • $6,000 in interest paid

If you opt to make a 20% downpayment, here’s what you would pay for the credit card debt.

  • 28-year payoff period
  • 15% interest
  • $225 per month
  • $12,000 in interest paid

You don’t have to make millions to save big with a mortgage.


To learn more go to:http://themortgagereports.com/21788/why-mark-zuckerberg-has-a-mortgage