Kevin O’Leary’s advice on home mortgages
Americans have $8.88 trillion worth of mortgage debt
The ABC “Shark Tank” host has one message for American homeowners: “Debt is evil.”
His advice to everyone is pay off your mortgage by 45 at the latest, ASAP if possible, and clear all debts before retirement, according to CNBC. A Federal Reserve Bank of New York report pegs American mortgage debt at a total value of $8.88 trillion, making it the largest household debt, and notes that a “substantial” increased in mortgage debt in the last quarter of 2017.
However, even O’Leary admits that a mortgage on a home that appreciates is a good move, so long as the investment works out. According to CoreLogic, in 2017, it did for most people with the average increase in home value coming in around $15,000.
“Mortgages are more of a gray area than credit card debt, because real estate can be an investment,” O’Leary told CNBC, but he still insists that 45 is the magic number come what may.
“The reason I say 45 is the turning point, or in your 40s, is because think about a career: Most careers start in early 20s and end in the mid-60s. So, when you’re 45 years old, the game is more than half over, and you better be out of debt, because you’re going to use the rest of the innings in that game to accrue capital,” he continued.
The number of residential mortgages originated in the first quarter of 2018 declined 3 percent compared to 2017 to 1.8 million, as The Real Deal reported, due to a 11 percent drop in refinancings; in the wake of interest rate hikes and accelerated appreciation, home equity lines of credit are filling the gap with a 14 percent increase in Q1. [CNBC] — Erin Hudson