Category Archives for "Mortgage"

A Guide To Successfully Buying Property

Buying a property, whether it is your first or fiftieth time, is a stressful process. For most people, buying real estate represents the biggest financial decision of their lives. Because there can be so much riding on this one purchase, it is imperative that you do the correct research and follow the correct procedures – a failure to do this can mean financial disaster.

Below is a brief guide to buying residential property. Consider this guide a starting point for your own research into buying property – information is your best friend in the real estate game!

Research

Research forms a solid base for any major purchase and the good news is, that you are doing some right now by reading this article! There is a variety of information you need to gather about your desired property and the local area before you commit to buying.

The first thing you need to do is look at the historical sales results for the suburb you wish to buy in. It is very likely that in the last few years a house very similar to the one you wish to purchase has been bought, or sold, in the local area. By comparing the historical prices paid to the current asking price, you can start to build a picture of the local market and decide if you are getting a good deal.

The next thing you need to seriously research, is the properties boundaries and any limitations on the use of the land it sits on. As people rebuild fences and conduct home improvements, the official boundaries can often be compromised. It is important that you are aware of the exact boundaries of the property you are purchasing – you can’t just rely on what your eyes tell you! In addition to this, local councils often place provisions on the use of residential land, such as specifying drainage areas and wildlife corridors. You can contact the council responsible for the suburb you wish to buy in to find out more about any land use limitations.

Inspections

Once you have done your research on the local real estate market and selected a property that you feel is a good deal, you need to start scheduling more in depth inspections. For this, you should hire a qualified building inspector. They will go over the property with a fine tooth comb, finding any major or minor faults, which may compromise the structural integrity of the house now, or in the future. If a house has faults, this doesn’t necessarily mean you shouldn’t buy it. However, you need to consider how much repairs will cost when deciding how much you will offer for the property.

Financing

Before you even start looking, you should have finance arranged. By knowing how much you have to spend, you will be able to focus your search on properties that you know are in your price range. Without positive confirmation of finance, you could just be wasting your own and everyone else’s time by looking at properties to buy.

Source : Ezinearticles

For more information please visit http://bit.ly/propertymillionaireintensive

The Advantages and Disadvantages of Buying a Lease Option

A Lease Option is technically a lease (rental) with the option to purchase. You are renting the home but have the right to purchase the home at anytime during the rental period at a pre-determined price. A lease option also can be a very favorable way to purchase a home because it provides the advantages of home ownership without the disadvantages of ownership.

The main advantages include: (1) No mortgage fees (2) less for a down payment

When structured property, there really are no disadvantages to a lease option relative to purchasing the home with a mortgage. When compared with renting, the major disadvantages of a lease option include: (1) pay more money upfront than renting (2) you are responsible for repairs, not the landlord. Each advantage and disadvantage will be discuss in greater detail below.

 

1. Advantage : No mortgage fees. This is because a lease option is technically a rental, the agreement is between you and the seller. Then it is also because of the bank is not involved, there are no bank fees, meaning that you don’t need to come up with the $5000 to $9000 that it costs to get a mortgage. However, eventually you will have to get a mortgage if you decide to stay in the home long term.

2. Advantage: Less for a down payment. Like the mortgage fees, because of the agreement is between you and the seller, the money down is negotiable, and sometimes not required at all, though the amount down typically ranges between $5000 and $10000 dollars. This is still better than the bank will require.

3. Disadvantage: Pay more money upfront. Typically a lease option requires a greater amount of money upfront than renting. This is not always the case and depends on how desperate the seller is the lease the home. Generally you can expect to pay twice what you normally would put as a deposit on a comparable rental.

4. Disadvantage: Responsible for repairs. One nice thing about renting is that the landlord is responsible for repairs. In a typical lease option, you are entirely responsible for maintenance of a home.
Finally, there are both advantages and disadvantages to buying a lease option. When compared with the buying the home with a mortgage, there is really no disadvantage. But when compared with renting, a lease option is a relative low risk investment for little additional out of pocket expense. The key is in the terms of the agreement between you and the landlord. The terms are negotiable, so make sure that you will do so. To summarize, a lease option can be a win/win situation for both buyer and seller. If you are looking for a home but don’t have enough for a regular down payment or are not sure if the market is going to get worse before better, you can consider a lease option and rest easy.

Source : ezinearticles

Important Things To Know Before Buying Property

Property laws vary from state to state but there are general guidelines real estate buyers would do well to know before investing in property. It isn’t simply a matter of having enough money to purchase real estate: you want to make sure it doesn’t turn out to cost more in the long run.

The value of property appreciates if it’s structurally sound, has essential amenities such as electricity, plumbing and water supply and is located in a neighborhood with easy access to hospitals, schools, colleges, transportation hubs, offices etc. Location is so important that it’s often the single factor that influences resale value.

Can you build a house on land?

You may have found a nice plot of land to build a house on. But can you? Some states have zoning restrictions on building houses and finding out what the laws are will eliminate expensive problems.

Know that buying land and building a house will cost a small fortune. Construction isn’t cheap especially when building for a family. The cost of materials is high and you’ll have to find a trusted contractor to advise you along the way.

Visit a house/land several times a day

When house-hunting, it’s wise to visit properties several times in the day. Evening and night visits mask problems with the house, noise levels of the neighborhood and intensity of traffic. Some buyers may be looking for a quiet street but won’t be able to tell the difference at night.

If land is being purchased, find out how close it is to amenities and whether there are any upcoming plans for commercial real estate construction. Some buyers inadvertently find themselves stuck in the middle of a commercial hub they didn’t anticipate would be built. Noise, traffic and crowds can mar the peacefulness of any location.

Do a house inspection

This is a vital part of the house-hunting process and the services of an inspector are required. Obvious problems like chipped or broken stairs, faulty doors and windows and peeling paint are cheaper to repair than those you can’t see. Inspectors may use tools like thermal imaging and draw on their expertise to pinpoint problems with insulation, plumbing and unsound foundations. The cost of an inspection isn’t very cheap but is a lot less expensive than being saddled with big repair works later on.

Check taxes

Some areas reappraise housing tax so it’s important to find out what the recent taxes are on a house. If you purchase property at a good deal only to be bogged down by rising taxes every year, you’ll take longer to pay the mortgage and the cost of maintenance will rise.

Check past renovations

The seller you approach may have made renovations to the house in the past. If this is the case, find out what it cost and what improvements were made. The cost will tell you if quality materials were used. Find out the date of the renovations as well to give an idea of whether you’ll need to make further improvements in the near future.

Don’t buy for short-term stay

Buying a house cost much more than renting one, at least for short stays. Don’t make the mistake of purchasing property if you don’t intend to live in it for at least several years. Paying off a mortgage takes time and a year or two isn’t enough for most people.

Source : Ezinearticles

For more information please visit http://bit.ly/propertymillionaireintensive

 

Should You Buy Property On Leased Land?

Most people who are searching for a home to buy don’t realize that it is possible to buy a home on leased land. Far from being an uncommon practice most people assume that when you buy a house you also purchase the land it is built on, but more and more non-traditional home buying options (like purchasing a home on leased land) are becoming available as the economy and housing markets continue to struggle.

Here are a few things to know about buying a property on land for leased as well as some pros and cons to help you decide if this is a viable path for you to go down in your home buying journey.

When looking at homes for sale you can tell if the one you are interested in is on leased land if the advertisement says something like ‘manufactured home’ or ‘leasehold interest.’ Also be aware of the word ‘association,’ which will be used to describe areas of the property that you have not explicitly purchased yourself. The price for a home on leased land will also be much lower than the average market price for other similar houses in the area. Leased-land properties are generally built close together and rarely have amenities like a private pool attached to them.

Mortgages are taken out on land for leased properties, but a monthly payment will likely be lower because the original purchase price was cheaper. A fee that you wouldn’t normally have to pay for a traditional home is a land lease fee, which will vary by property. You may also find that some leased-land properties have massive home owner’s association fees that are used to cover the upkeep and maintenance of the leased land areas.

If you are considering buying a property on land for leased it will be beneficial to come up with an outline of your budget for a regular property and for the leased-land property. When you write down the savings and additional fees for both you might find that one is a step above the other when it comes to benefits and price (and it might not be the property you think!). Be reasonable when it comes to assessing your financial goals in the purchase of property, leased-land or otherwise.

You will also want to find out from the owner or realtor how much time is left on the lease. Generally you want to look for properties with a long lease left as you won’t have to worry about the changes that will occur if the lease ends while you are still living there. If the lease is shorter you might find it difficult to get a mortgage and finance your home. If the lease is up soon and you decide to purchase the property anyways, make sure you know what you will happen to the property when the lease ends.

Buying a home on leased land could be a sound financial decision, but weigh your options before you rush into anything.

Source : Ezinearticles

For more information please visit http://bit.ly/propertymillionaireintensive

Financial Mistakes Rich People Never Make

There are some financial mistakes that rich people never make. The journey in becoming rich will require you to make a few mental changes in your behaviors. Once you make these adjustments, you will begin to see the progress as your create more positive results in your life. Acquiring wealth is a great goal, but who you become in the process is even more worthwhile.

Here are the financial mistakes rich people never make:

1. Buying on Credit

Many people purchase the objects they can’t afford with money, they don’t have to impress people they don’t like. This tragedy decimates many people, leaving them with a hopeless feeling when they repay their high-interest loans. If a person hopes to become rich, they will use their credit cards for growing and promoting their business, not funding personal expenditures.

2. Mortgaging a Home

Some “rich” people mortgage their homes, but they aren’t really rich. Mortgaging your home leads to an endless battle of re-financing, bill-paying, and inflation. When you mortgage a home, you’re likely to pay twice as much asthe original price. Rich people will rent until they can buy their house with straight cash.

3. Traditional Retirements

Our retirement system is a joke that must be avoid by those who want to become rich. If you’re depending on mutual funds, 401(k), and certain life-insurance policies, you’ll do better boarding the Titanic. Plus, if you’re saving money to enjoy it for your sixties, that’s like saving up sex for retirement. Instead, build your fortune when you are young.

4. Not Saving

Most people blow their money on miscellaneous goods. When they see ‘X’ amount in their bank account, they automatically think of what they need and purchase it immediately. However, this impulsive behavior must be eliminated. Rich people save at least 10 percent of what they earn and rarely take out personal loans for themselves, even if they think they need it.

5. Lack of Enjoyment

Consumerism is funny. During 50 weeks at work, people think about vacations and when they finally get their two weeks, they only think about work. The truth about becoming rich is that you must enjoy the money that you already have, whether it’s $10 or $100. Your money will only expand if you enjoy it and think about how you can enjoy it more. You’ll always get more of what you enjoy.

 

Source : entrepreneur

To get more information, you can go to the page by click the link below :

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Six Things Every Home Buyer Should Know About Mortgages

Only a small demographic of home buyers has a couple hundred thousand dollars laying around to pay cash for their new home with. That means the majority of us have to take out a loan to buy our homes. Getting into a mortgage loan with high rates or bad terms adds thousands of dollars to the final cost of the home. A few ways to ensure that your mortgage process goes smoothly and you get a good deal in the end include:

1.Research types of home loans.

Depending on your circumstances, you may qualify an alternative loans that offer various advantages:

  • USDA Rural Development Loans. A rural development loan is guaranteed by the USDA and requires no down payment. You may qualify for this type of loan if your home is considered to be in rural area.
  • VA loans. VA loans are available to qualified veterans or their spouses. Like rural development loans, VA loans also require no down payment, but offer the benefit of not requiring mortgage insurance to back the loan. VA loans typically offer reduced and competitive mortgages rates as well.
  • FHA home loans. FHA home loans are insured by the Federal Housing Administration and anyone who hasn’t owned a home within the last three years qualifies for it. The advantage of FHA home loansis that a home can be purchased with only a 3.5% down payment. Home buyers who are limited on cash like FHA home loans, because in addition to the reduced down payment, it allows the lender or seller to cover closing costs and additional fees like inspections. FHA home loans require mortgage insurance, to protect the lender’s investment.

Not all lenders offer all of these alternative loans, once you identify the loan type best for you, select a lender who offers it.

2. Gather quotes from several lenders and conduct an apples-to-apples home loans comparison.

There are several factors to look at when you compare mortgages beyond just the interest rate. Some lenders charge origination fees, require buyers purchase points for getting lower rates, or other additional fees. Even if the loan is “no fee” loan, these costs are sometimes just rolled into the mortgage rate. Make sure you understand everything you would have to pay if you got a mortgage with the lender before you choose one.

3. Make sure you trust the person who actually handles your loan.

There are hundreds of moving pieces that go into getting a home loan, you want someone who is very capable to oversee it. Hiring a mortgage broker is a great way to have someone on your team who knows what they are doing. Even if you don’t use a broker, make sure that you know the person who is actually handling your loan, that you trust them, and that they are highly qualified.

4. Work on your credit score.

Typically, the better your credit score is, the better your mortgage rate will be. Before getting into the home buying process, focus on factors that are hurting your credit, such as errors on your credit report, having too many credit cards in your name, or having high a high debt to available credit ratio. Most lenders require a minimum credit score of 680 to qualify for a home loan (or 620 for FHA home loans), but the better your credit score, the better your chances of getting a great mortgage.

5. Put all your cards on the table while working with your lender.

Even if you have a great credit score, if you just changed jobs, if your monthly expenses exceed 36% of your income, or if you’re self-employed, you may have trouble getting a home loan. These are good factors to talk to your lending officer about before you get too far along with the process.

6. Save your cash.

In addition to your down payment, you will have to pay a myriad of fees while you’re buying your home. You’ll likely have to pay for inspections, closing costs, and possibly for points to lower your interest rate. You might be excited about your new home, but don’t buy furniture until you have the keys.

Source: WMAPROPERTY

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Commercial Mortgages, What To Expect?

The rise of the U.S. mortgage market occurred between 1949 and the turn of the 20th century, and different types of home loans are now the conventional method for people to purchase homes and commercial property.

Perhaps you have applied for a home mortgage and are now seeking a loan for the property that houses your new business or company. If you think you’ve mastered the mortgage process and are prepared for round two, think again. The commercial mortgage process is a completely different beast, and can be very complicated.

Unlike residential mortgages, commercial mortgages are not backed by the government, as with entities like Fannie Mae. This means that direct mortgage lenders are twice as likely to be risk averse since the responsibility of the loan is on them. The consequence is that interest rates are much higher than with residential loans. Some lenders will even take it to the extreme by asking for the borrower’s business as collateral in addition to the property in which the business will be housed.

Another thing you should know if you are planning on taking out a commercial mortgage is that the loan will need to be repaid much earlier than its stated due date This is because the bank will require most of its loans to include a balloon repayment, meaning that the borrower will pay interest and principal for the first few years of the mortgage, and then the entire balance in one balloon payment.

Since most borrowers won’t be able to save enough in such a short time, they normally re-qualify for their commercial mortgages or refinance at the end of the balloon term. The major disadvantage of this system is that if the business owner had cash flow problems during the preceding years, he or she may be presented with higher interest rates or get the loan denied altogether.

Of course, in addition to a business mortgage, owners and investors must consider other costs, like the expenses from a business loan and unanticipated start-up costs. This is why it is very important to lock in a rate as soon as you are comfortable with the numbers after you have compared mortgages.

As with residential mortgages, it is still important to maintain a good credit score (many lenders require a minimum credit score of 680), and to have enough for a down payment, which can typically be 3.5% of the home’s cost.

Don’t forget to compare different types of mortgages and commercial mortgages to find out which is right for your business.

Source: WMAPROPERTY

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Debt Management – Pros & Cons

This article takes a look at the pros and cons of debt management in terms of three topics close to any borrower’s heart: saving money, reducing stress levels and protecting credit rating.

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wealth conference 2016

Topic #1: Saving money

Pros: Monthly payments lowered. Interest frozen. Charges waived. The better their relationship with creditors, the better a debt management company’s chances of successfully negotiating for one or more of these concessions. This can save the client a considerable amount of money – not just every month, but potentially over the course of the debt management plan as well.

Cons: Lowering monthly payments means debts take longer to pay back. If interest hasn’t been frozen, they’ll also accumulate interest for longer, adding to the long-term cost. Plus, there’s no guarantee creditors will agree to any concessions, or that they’ll save the client more in the long run than the debt management company charges in fees. And since a debt management plan is an informal agreement, they’re free to change their minds.


Topic #2: Reducing stress levels

Pros: Some people don’t have the time to deal with complicated finances, or don’t feel confident about doing so. For them, it’s a huge relief to hand their debts over to someone else, who might handle everything from letters and phone calls to negotiations and payment distribution. And some people admit they’re no good at juggling numbers and negotiating deals, so it makes sense to let a professional talk to creditors and propose a repayment plan that leaves them enough money for essential bills and other expenses.

Cons: Not everyone feels like this. Many people would rather keep their finger on the pulse personally, so the thought of adding an intermediary just adds more complexity to an already-complicated matter. In short, they feel less stressed when they know they’re handling it themselves.


Topic #3: Protecting credit rating

Pros: By making new arrangements with creditors, a debt management company can minimize the impact of debt on someone’s credit rating, keeping debt problems from escalating into CCJs (County Court Judgments) or even bankruptcy. Plus, even though debt management addresses unsecured debts, it frees up money for secured debts such as mortgage payments, so people can avoid getting into arrears – or even being evicted.

Cons: When they agree to reduced payment terms, creditors may register a default (if they haven’t done so already) and this will appear on the borrower’s credit report, potentially making it harder and more expensive to get credit.

Article Source: EzineArticles.com

Debt management isn’t for everyone. Some people don’t like the idea of delegating their financial affairs like this.

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What Is Debt? How Can I Eliminate It?

Some people wonder what is debt and how can it affect you. Basically debt is the amount of money that is owed to financial institutions, business and individuals. In 1973 the total consumer debt owed by the American people totaled about 8 billion dollars today the total US consumer debt is approaching 900 billion dollars. The largest portion of this debt is in the form of credit card debt. Each year credit card companies earn approximately 150 billion dollars as a result of this debt. Almost 90 billion of these earnings come from late fees and penalties.

3d people - man, people push up word "tax"

The consequences of all this debt is staggering to the financial security of our nation. Credit card companies have replaced the local sleazy corner loan shark in dispensing pain and suffering to the American family. What is debt? The Bible states in proverbs that “the borrower is the slave to the lender” If you have consumer debt especially credit card debt then you are a slave to these institutions. Credit card companies have invented the FICO or credit score to encourage you to increase your debt. The more debt you have the higher your score. It is interesting that several millionaires and one billionaire that we know have credit scores of 0 that’s right Zero.

So what is debt doing to the American family? At this time of recession and the mortgage crisis many families are using their credit cards to get by and even buying groceries with this plastic money. Eventually they cannot meet the monthly payments. This is just what the credit card and consumer credit companies want. A late or missed payment and the interest rate on a credit card can rise to over 30%. Remember all the money credit card companies make each year in the form of late fees and penalties?

Wood block building and hand writing

The number one cause of divorce is money or better yet the lack of it. Excessive credit card debt is tearing families apart and is linked to domestic abuse and violence. What is debt? Debt destroys families and threatens to undermine the financial security of our country. Basically as one of my friends who recently became a millionaire stated “the best way to become wealthy is to stay out of debt”.

The only way to protect yourself is to develop a debt elimination plan and stick to it. You may need the assistance of financial counseling service to set up your plan. Step one of the plan is stop borrowing money. That means that you cut up all your credit cards and you live on a cash basis. This is hard for many people who have used credit cards all their life and have never lived at or below their means. But the system really does work and in many cases a family will be totally out of debt in less than 3 years. It is simple and very effective if you love your family and have the discipline to stick to the plan.

Article Source: EzineArticles.com

Rich Debt, Poor Debt

There are many types of debts. There are many reasons why people take on a debt. People may incur debt because of an emergency, a large purchase made earlier, to improve one’s lifestyle and, a mode of investment and etc. Yes my friend, people and organizations use debts to grow. Let’s dive deep into how debts puts you in a worst off situation, and what is actually a good debt.

growth investor

POOR DEBT

In the world that we live in today, especially for middle class employees, it always seems that the cost of living is picking up faster than what we earn from our pay cheques. Despite this, we have seen tremendous growth in lifestyle expenditure. The unfortunate part of this culture is that it has created a lot of debts which makes people poor. Let’s take credit cards as an example. An average of 40% of customers today revolve (never pay credit card spending in full every month) on their credit cards. It is shocking that this has grown from only 25% more than a decade back. When you spend beyond your means and revolve unnecessarily, especially on lifestyle expenditure, you are paying as high as 18% annual interest. To make matters worse, most of these expenses depreciate over time.

Personal loans are another form of new age credit facilities which has an attractive easy cash access with no security pledged or charged. Many have been attracted to the sudden access to large volumes of cash which can be used for anything at all. This is another lending that gives an after effect of possibly one week of pure enjoyment and up to 5-7 years of painful commitment. A commitment that after a while you may ask yourself; was it even worth it.

Credit card and personal loan debt is one of the most expensive debt in the market. Please see below on the comparison of the interest rate based on EIR (effective lending rate).

Personal Loan – 16%-24%

Credit Card – 15%-18%

Car Loan – 7%-8%

Mortgage – 4.5%-5%

wealth conference 2016

wealth conference 2016

People who get stuck in expensive debts ie Personal Loans and Credit Cards will eventually become poorer and poorer.  Let me show you how this works:

You get continuously stuck in an expensive debt trap

You see that your debts have continued to pile up with no way to get out of it

You are trying to have it all but have no financial roadmap

Your money is being spent faster than being used to make more money

You continue to ignore big debts

You continuously pay debts which you can then incur more debts

You buy depreciating items

You put today’s happiness before future Financial freedom

You incur debts that gives you short term happiness and that does not work hard to grow your wealth for the future

You invest on other things instead of yourself.

You are spending too much on housing

This refers to your own house. You invest heavily into your house where lifestyle expenditure on it exceeds the current market value of the property.

According to Robert Kiyosaki (author of Rich Dad, Poor Dad), wealth is measured in time. If you were to lose your job today, how long could you afford to live at your current standard of living? If it’s 3 months, then you are “3 months wealthy.” Your income becomes largely irrelevant.

In short, a poor debt is basically using any future income to pay for past expenses.


RICH DEBT

Let’s look at debts that can actually make some of you richer.

Imagine this.

  1. Catherine buys an asset worth RM1mil, and after 3 years, she sells it off for RM1.2mil and makes a handsome profit of 20%. She has the cash to pay the entire asset of RM1mil but she chooses not too.  She initially took a loan that financed 90% of this asset. Her capital outlay is only RM100,000. After 3 years, her property is potentially worth RM1.2mil.  
  2. Tommy buys the same asset worth RM1mil, and after 3 years, he too has the potential to sell it off for RM1.2mil making a handsome profit of 20%. He too has the cash to pay the entire asset of RM1mil in cash and decides not to take a mortgage for it.  After 3 years, his property is potentially worth RM1.2mil.  

What do we see above? Who is a smarter investor? Who makes more money? Who is financially more resilient?

Here are some observations to ponder

Catherine only used RM100,000 to make RM200,000 over 3 years.

Tommy on the other hand used RM1Mil to make RM200,000 over 3 years.

Catherine has a remaining RM900,000 in her banking account for any life emergencies she might have. She can also continue to invest when the opportunity arises.

Tommy on the other hand does not have this advantage.

In simple terms, your RM100,000 investment has given you a return of RM200,000 over 3 years. Doesn’t that make more financial sense? Catherine has successfully leveraged her way for higher gains.

Many of us know that property is one of the safest investment journey’s one can take and make money over time. But it only makes sense if the initial cost of investment is pushed to the minimal such as a low down payment on a property, while the benefit of appreciation and capital gains are based on the total value of the property.


WHAT IS LEVERAGING?

By definition, leveraging is any process that compounds risk. In the context of investing, leveraging is the process of using borrowed money (someone else’s money) to make money. A mortgage is a cost-effective way of borrowing. Interest rates on mortgages is no doubt the cheapest form of borrowing available in the market simply because the loan is secured against your property. You are essentially using other people’s money (the mortgage) to purchase something (property) which increases in value over time.

What this has created is that you are now boosting your wealth with effective returns. Just as the example of Catherine and Tommy. But, what about paying for monthly instalments? Is that still a bad debt? Alternatively, leveraging can be a means of force savings too. The difference is you would invest a lump sum of borrowed money and your money would start working immediately. On a monthly basis, you would be paying the interest instead. Any way you do it, forced savings is essential to building wealth.

On top of that let’s look at it from a financial security stand point. While there is a certain sense of security that comes from paying off your mortgage, there is security too in having cash in the bank because you have a mortgage on your home instead of paying all cash. Life is fraught with rainy days–from car breakdowns to illness and job loss–and every one of them is costly. You will be in a much better position to weather economic storms with a mortgage than without, assuming you have put money aside. This money would become handy in needy times and are not locked into your investment.

On the other hand, taking up a mortgage and freeing up existing cash flow has another benefit. There could be a future opportunity which you may come across. The value of opportunity may be difficult to define but it is certainly real. If a once-in-a-lifetime business opportunity arises overnight, would you be able to take advantage of it if your money has gone to pay off your mortgage or purchase a property without a mortgage? You might be saving a great deal of money by avoiding mortgage interests but that might pale in comparison to what you could make in a business venture. It could be a new business opportunity or it could be another new property investment opportunity.


wealth conference 2016

wealth conference 2016

BORROWING IS NOT NEW

Think about it, you borrow money everyday. We borrow to buy our homes, we borrow to buy depreciating assets like cars and we also borrow to buy items that have no value like consumer goods (via credit card). Most of the time we borrow to do things that are not financially productive. Leveraging can be incredibly productive when it is understood and used properly.

Even corporations understand this is the right way to do it. Many large companies have the cash to pay off debt but they do not. They understand the power of leverage. In fact, most companies are highly leveraged! Why? They raise public debt in the form of bonds at 8% and turn around to make 15% on that money. They have it figured out.

Why can’t individuals do the same?  We certainly can! Equip yourself with the right financial knowledge and start using mortgages as a wealth creation tool.  A mortgage is not necessarily a bad thing.  It can be used as arbitrage to leverage what you don’t have and yet benefit base on the total current value of the property when it appreciates over time. The key here is mortgage allows us to leverage and leverage allows us to Do More with Less!!

loan

Source: PropertyInsight

Be a SMART investor, pay off the Poor Debt and start accumulating Rich Debt today!

For more information about Property Investment, please visit 👉 Property Millionaire Intensive