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A (mythical) belief among Americans is that The Wealthy are more likely to own their homes free-and-clear than are their middle- or lower-class counterparts.  That's false.

According to MSN Money:

• 55.5% of Wealthy homeowners have a mortgage
• 44.6% of the overall population has a mortgage

Stated differently, wealthy Americans are 25 percent more likely than everyone else to have a mortgage on their home.  Consider that myth busted.

One major reason why wealthy homeowners are more likely to have a mortgage is because the interest paid on a home loan is a tax-deductible expense. 

The same can't be said for car loans and credit card debts.

Because mortgage interest is tax-deductible, therefore, the "bottom line" interest rate on a home loan is lower than the interest rate written on the actual mortgage note.  For example, a homeowner in the 33% tax bracket with a 6.000% mortgage rate is paying an after-tax interest rate of 4.02%. 

Do the math on your own mortgage:

(After-Tax Interest Rate) = (Note Rate) * (1 - Taxable Income Rate)

Suddenly, mortgage debt looks cheap(er).

Wealthy homeowners often work with financial planners to take a bank-like approach to borrowing money.  If their "bottom line" mortgage rate is really 4.02%, the financial planner tries to find a low-risk investment whose post-tax return is greater than 4.02%. 

If the financial planner accomplishes this goal, the wealthy homeowner is borrowing at a low rate, and earning interest at a high rate -- just like a bank.  That interest rate spread is profit.

The good news is that (1) Anyone can use the tax benefits of a mortgage to their advantage, and (2) Financial planners like to work with people that have a plan, regardless of income.  So, even if your means are limited, you can still emulate the Wealthy in managing mortgage debt and other finances.

Source
5 Lessons The Rich Can Teach You
Liz Pulliam Weston
MSN Money

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Dan Green is an active loan officer. Email or call 513-443-2020. Dan is on Twitter at @mortgagereports.