Owning a home is as American as apple pie, baseball and budget deficits. But is it really a good idea to own your home outright? Here are five arguments why you should carry as big a mortgage as you can.

One: Mortgages don't effect home values

Everybody likes to own, because homes increase in value. But growth in your home has nothing to do with the amount of equity you hold in it; the value will rise or fall regardless of the size of your mortgage.

Therefore, having lots of money in home equity is like having money in a mattress: it's not earning any interest. You would never keep $100,000 under your bed, yet lots of people have a quarter million in their walls. In other words, get the money out of the house.

Two: Your mortgage is the cheapest money you'll ever buy.

A mortgage (or home equity loan) costs only 8 percent and some loans are even cheaper. And you can deduct all your mortgage interest expenses. Most people are in combined federal and state income brackets of 33 percent, so the government subsidizes a third of your mortgage interest. That means that your 8 percent home loan costs you only 5.4 percent. Compare that with an 18 percent credit card, where none of the interest is deductible. Result: Your home is less than a third of the cost of a credit card loan. So, if you have any debts, pay them off; if you can't replace them with a home loan. In other words, get the money out of the house.

Three: Get the cash out while you can.

Many retired couples have little savings, but they have paid-for homes. When there's a catastrophic illness, costing $3,000 a month in long- term care, the only source of money is the house and the only way to get it is to sell. Result: The couple loses their home of 40 years.

The solution is to take the cash out of the house before you and your spouse retire so that it is available in the event of a financial or medical crisis. Invest your equity in super-safe U.S. government bonds, and use this monthly interest to pay off the new mortgage. In other words, aside from closing costs, the loan will be a wash; and if your broker or financial planner is good, you may even be able to earn more in interest than the loan costs you.

And you could cancel the whole idea anytime by cashing in the bonds and paying off the mortgage. The point is this: When you have the cash, you have many options. When the cash is tied up in your home, your choices are very limited. In other words, get the cash out of the house.

Four: If you don't borrow it when you buy, you can't deduct it later.

Under tax law, mortgage interest is deductible only for acquisition debt, or in some cases, acquisition debt plus $100,000, subject to certain limitations.

If you sell a $300,000 home and buy a new one for the same price with the cash from the proceeds from the old home, you will lose the tax break and liquidity discussed earlier. But, worse, if you later decide to take out a home equity loan, only the first $100,000 will be tax deductible.

However, if you took out a 90 percent mortgage ($270,000), the entire amount would be deductible. And if you later pay off the mortgage- whether in 10 days or 30 years - you can always return to a home equity loan in the future: and when you do, the full $270,000 plus another $100,000 might be deductible, provided the total indebtedness does not exceed the home's market value. In other words, Keep the cash out of the house.

Five: A 30-year mortgage is better that 15.

On a $150,000 loan at 8 percent, a 30 year mortgage would cost $1,100 per month; but mortgage bankers will tell you that for $333 more per month, you can get a 15-year mortgage instead. Thus, they say, you'll own your home in half the time and save $133,207 in interest charges. Sound great?

Yes, but try this: Take the 30-year mortgage and invest the excess of $333. Assuming you earn 10 percent, which is no great challenge these days, at the end of 15 years you'll have saved $113,022 after taxes - virtually the same as your mortgage's outstanding balance. So you can pay off your mortgage if you want, giving you the equivalent of a 15-year note.

Why do this if the numbers are the same? For all these great reasons:

1. Your cash remains available to you if you need it for another property. Cash tends to be tight after buying a new home, so the lower payments will prove very helpful.
2. That extra $333 mortgage payment goes toward principal, not interest, so there is no tax break on making it.
3. You lose your tax deduction quicker on the 15-year note than on the 30-year. Your mortgage payment stays fixed, but your income grows with inflation, meaning you get to pay off today's fixed loan with cheaper, future dollars.

In other words, keep the cash out of the house.

(There is one caveat to this strategy: you must religiously set aside the $333 each month. If you don't, you'll have nothing in 15 years but 15 years left on your mortgage. A good planner or adviser can show you how to set up a systematic investment program so you'll be sure to save that $333.)

At first thought, a home mortgage may seem risky. But if you really think about it, it's the only way to go.

BretlinFloridaMortgage.com - We Provide Mortgage Loans from $100,000 to $15,000,000 for refinancing and home purchase.  We specialize in 100% financing for homes. Phone: 800-572-5964 Email: info@bretlinfloridamortgage.com

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