1. Read and translate the text.

1 The word "mortgage" means borrowed credit. In other words, a loan with interest, with the guarantee of payment in the form of a house. There is a creditor - a bank - owning these homes until the debt is paid up. The mortgage payments⁴⁷ often account for 35 percent of the family budget, and sometimes more. Thus, the term is an important one in America.

2 Those who pay mortgages are those who own their homes, town houses or simply apartments. Not by a long short⁴⁸ all Americans own their places of residence. Meanwhile, despite the large expense which goes along with paying a mortgage, Americans strive all the same⁴⁹ to own the place which they call home. Why is this?

3 First of all, renting apartments (or houses) becomes more expensive each year, even in those places where the government tries to subsidize housing. The growth in incomes just doesn't keep up with climbing rents.

4 Secondly, real estate usually increases in price, and this price either out-distance inflation, or at least doesn't fall behind it. With the rise in the price of real estate, your financial means, invested in real estate, also grow. Such investments enable people to combat inflation.

5 Thirdly, the widely developed system of loans with interest allows you in many instances not only to fight inflation, but to earn money from it in the form of the value of your home (as is the case, by the way, with real estate in general).

6 How this works, when given a general outline⁵⁰, is simple enough to understand. In America, real estate is bought, as a rule, on credit. Very rarely does someone collect a sufficient quantity of loose cash needed for such a purchase. We are talking, usually, about tens or hundreds of thousands of dollars. But even if such money were available it is not smart to freeze up these funds over a long period. It is much more lucrative to allow cash to circulate, either to invest it or to have it in the bank where it makes interest.

7 As a rule, you put cash down⁵¹ to cover 5-15 percent of the cost. The rest - mortgage. Banks make money off this, receiving on their money a specified yearly interest. At the same time a mortgage is not only profitable for them.

8 When real estate grows in value, though that money which you laid down for the property is only a part of its value, you earn a 100 percent of the growth of the whole price on the real estate. For example, having bought a 100 thousand dollar house, you put down, in all, 10 thousand, and the rest you owe to the bank (mortgage). The whole 100 thousand dollar house actually even grows in price. Having sold the house, at a new higher price, you pocket the difference between the new and old prices.

9 But this is still not all. The interest on the mortgage paid to the bank (in the mortgage payment it is not only the interest but also a sum which is the consistent paying off of the original debt) and the real estate tax, are expenditures which the smart American legal system does not impose taxes on. Filling out your tax declaration, you put these sums in the expenditure section, in this way shrinking the overall sum you will pay in taxes.

10 Many banks offer what is called a "return mortgage". In essence, this means that the bank starts to pay to the debtor, when he reaches a specified age, his mortgage to buy back the house again from him, with the idea that after a certain number of years the bank will own the house in full. The “return mortgage” is really its own form of a pension, which many seniors gladly participate in, as if "living off⁵² in old age their home – their main (and sometimes even single) material possession left in life. The "return mortgage" illustrates the fact that investing in real estate is one of the best ways to assure your financial independence in America.

11 Naturally, real estate deals are not limited to the purchase of a private single family home. Some go even further and buy apartment buildings. This is a common form of earning a living off real estate.