One of the reasons a home is a terrific buy is because of the 30-year mortgage.
The investor took out a 30-year mortgage in 1971 when he bought his Laguna Beach, California, vacation home, which he recently listed for $11 million: "When I bought it for $150,000, I borrowed some money from Great Western Savings and Loans. So I probably only had $30,000 of equity in it or something like that. It's the only mortgage I've had for 50 years."
A 30-year mortgage is "the best instrument in the world," Buffett says. "Because if you're wrong and rates go to 2 percent, which I don't think they will, you pay it off. It's a one-way renegotiation. It is an incredibly attractive instrument for the homeowner and you've got a one-way bet."
While his six-bedroom, seven-bathroom seaside place is for sale, don't expect his house in Omaha, Nebraska, which he bought in 1958 for $31,500, to go on the market anytime soon. "I wouldn't trade it for anything," says Buffett.
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