A mortgage is a legal agreement in which a person borrows money to buy property (such as a house) and pays back the money with interest. Most homes in America are obtained through mortgages, since the purchase price of most livable houses is far outside the financial means of most home buyers. So people who desire to own a home rather than rent are faced with a dilemma: purchase a shack with cash on hand or take out a mortgage to purchase a nicer house they can reasonably afford. But a mortgage means the home buyer will be indebted to the loan company for thirty years, usually, paying interest and taxes on a depreciating property. Is this a wise use of the money God has entrusted to us? Is it wrong for a Christian to buy a house on a mortgage?
God entrusts His people with resources so they may lend to those in need and give generously (Psalm 15:5; 37:21; Matthew 5:42). When we are faithful with those resources, He often entrusts us with more (Luke 16:10). However, when all our resources are tied up in interest rates and debt repayment, we have little left to invest in God’s kingdom.
Romans 13:7–8 gives us another clue into God’s ideal: “Give to everyone what you owe them: If you owe taxes, pay taxes; if revenue, then revenue; if respect, then respect; if honor, then honor. Let no debt remain outstanding, except the continuing debt to love one another, for whoever loves others has fulfilled the law” (emphasis added). The King James Version words it this way: “Owe no man any thing, but to love one another.” As faithful stewards of all God has given us, we should desire that our financial choices move us toward living as debt-free as possible.
Some people consider themselves to be living debt-free when a house payment is their only outstanding debt. They pay cash for used cars and pay off their credit cards every month so that there is never a fee or interest payment. When they have purchased a home with a mortgage that is well within their means, they are still living responsible lives of stewardship. They would have to be paying rent anyway, so the house payment is actually a wiser investment. They own the house rather than the house owning them.
However, many people don’t do their financial homework first before talking to a real estate agent and are persuaded to take out a mortgage on a house that costs more than they can easily afford. Simply because a person may “qualify” for a certain amount does not mean he should lock himself into such high payments. Wise home buyers prayerfully consider all their options. They ask themselves whether a smaller, less expensive home would be just as useful. And they are careful to plan payments around one paycheck, leaving room for unforeseeable emergencies.
One error people often make in taking out a mortgage is assuming that their lifestyle and income will remain the same as it was on closing day. James 4:14–15 says, “Why, you do not even know what will happen tomorrow. What is your life? You are a mist that appears for a little while and then vanishes. Instead, you ought to say, ‘If it is the Lord’s will, we will live and do this or that.’” It is dangerous to lock ourselves into debt payments that are dependent upon our jobs and financial status always remaining the same. People get sick. Jobs close. Layoffs, cancer, and unexpected babies can all affect the income level, create major stress, and even lead to foreclosure.
In the case of someone mortgaging the home he owns outright, the reasons for doing so should be unavoidable. Some people spend years paying off their home, but once they are debt-free, they leap right back into debtor-status by re-mortgaging that home and using the cash for something that is transient or depreciates. If a financial crisis such as a medical emergency requires a huge financial outlay, then mortgaging the home may be the only option. But, depending on the laws in that area, a family could be setting themselves up to be homeless when they cannot repay the second mortgage.
There are many factors, both financial and spiritual, to consider before mortgaging a home. It is unwise to rush into a mortgage because we are unwilling to wait upon the Lord’s timing in providing the home He wants for us (Psalm 145:14–19). It’s tempting to want what our friends have and so bite off more than we can chew (James 4:3). Or to go after our dreams in our own ways rather than trust the Lord to provide in His way (Psalm 37:4). In those cases, it would be wrong to mortgage a home and place indebtedness over our finances for the next thirty years. God may have other plans for our lives that indebtedness would prevent. However, if the Lord has provided an excellent opportunity that is well within our means, and it will not impede our ability to weather life changes or give faithfully to His work, then a mortgage may be the best way to provide stability for our families.