patrick.net

In effect, mortgage interest is subsidized, meaning you end up paying a lower effective interest rate. A 3.75 percent mortgage becomes approximately a 2.8 percent mortgage, and there are a lot more houses you can afford with a 2.8 percent mortgage. That's the point. The tax code is designed to incentivize people to buy houses. Not just any houses, but bigger, more extravagant houses -- built by homebuilders. We have unintentionally designed a tax code whose intent is to drive people into debt to buy houses, making the economy more fragile.

This is incorrect.

The tax code was intentionally designed to drive people into debt.

Your debt is your creditors' wealth. When you are in debt, you are forced into labor for their enjoyment. That's all there is to it.

Patrick says

Your debt is your creditors' wealth. When you are in debt, you are forced into labor for their enjoyment.

Not for a rational buyer. Going at 3.75% debt to get a 6% rent-ability on your house make sense for many.
I personally prefer to have a mortgage and invest the money on the SP500
I don't understand your comments Patrick. You are usually a numbers person. Debt or credit is not bad or good, it is just expensive or cheap.

Uncle Sam reducing it from 3.75% to 2.8% is because uncle Sam prefers you to invest in a house than on going to the mall. Uncle Sam (or his lobbyist) know better than you

Patrick says

Your debt is your creditors' wealth. When you are in debt, you are forced into labor for their enjoyment. That's all there is to it.

This doesn't apply to home loans, but if you're into credit cards points, you can stick it to creditors if you're religious about paying them off. It also helps if you have to expenses for work. My wife and I get points benefits equal to about $5k in value every year. And that's not including on our southwest card we we've obtained the companion pass. You have to be disciplined, have high expenses or expenses from/for work, but you can get payback to the creditors, literally. The beautiful part is the rewards are tax free. So if applied to my top bracket, add in state income taxes it's more like getting $8-10k in value.

As far as a home, have to agree with Ja's comment. Credit is either expensive or cheap (not the rate, how much you choose to use), and the person taking it out has a solid amount of control over it. I would never go over the 1:3 ratio for income to home value ($100k income means no more than $300k house). I currently sit at 1:1 income to value wise, but I actually make more than my mortgage balance. I chose the cheap credit and life style. Could easily have gotten a $600k house here in IL and not blinked at the payment.

So now my wife, myself and kids can easily afford big time vacations with the companion pass anywhere in the US and some international destinations in this hemisphere. I did hear SW is going to start flying to Hawaii. So that might be our summer trip in 2018. Already got spring break planned. Flying to Pensacola where airlines rip you off because it's a smaller regional airport. Round trip for 4 was $2k. Paid $44 in fees and used point for 3 people and I'm free (except the fee). That's just over $1,900 value on just one trip. While I know these credit card issuers are still making massive profits, I'm making them just a little bit smaller.

ja says

Going at 3.75% debt to get a 6% rent-ability on your house make sense for many.

Sure, if that's possible it's great. It's certainly not possible around here.

And no matter what the interest rate, if you borrow beyond easy ability to pay, you are indeed working mainly for your creditor. Most people unwisely borrow as much as they can.

Patrick is anti debt period. I personally hate debt too. The ability to lend and borrow is what makes our economy spin. Most people would not be able to buy homes if it was not for the ability to borrow. Most businesses would not have taken off if they could not borrow.
The biggest debtor is the US government. That is one idiot who does not know what he is doing.