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A mortgage is defined as a temporary, conditional pledge of property to a creditor as security for performance of an obligation or repayment of a debt. Think about that for a moment. Is that how you see your Mortgage? Most people see their Mortgage this way & they are correct. However this is not the only way a Mortgage should be defined. Added to this definition should be the word leverage. Which means: the use of a small initial investment, credit, or borrowed funds to gain a very high return in relation to one's investment, to control a much larger investment, or to reduce one's own liability for any loss. Having a Mortgage gives you leverage. Let's take a look at 5 ways to leverage your Mortgage to financial freedom.
Eliminate Debt
Through a refinance you can access money to pay off bills. This is powerful because every month bills are due. For example, Mortgage $1500, Car $400, Credit Cards $270, installment loan $600. A monthly expense total of $2775. Consolidating all of these payments into 1 monthly payment can save you hundreds of dollars. Going from $2775 per month to $1943 per month is a monthly savings of $832 & a yearly savings of $9984. Doing this will free up money & improve your credit rating.
Investment Capital
In addition to paying off debt you can use additional cash to invest. Start a retirement fund, a college fund, start a business, or buy an investment property. You can do this while still saving money each month.
Increase Tax Deductions
Applying for a Mortgage at a higher Loan To Value will increase the interest rate. That's OK because it allows you more money & due to the higher rate you pay more in interest which increases your tax deductions.
Lower Term
With this plan in place you should ask yourself when you want this loan to be paid in full. If you plan to retire in 25 years, you may not want a 30 year term loan. Monthly savings is not the only savings. You can save thousands of dollars over the life of the loan by shortening the term.
Deferred Payment
After you close this new loan, payments on everything you've just paid off don't have to be paid. The new loan payments won't begin for 30 to 60 days. During this time your money is free to do with it as you will.
I hoped this information helped you to see that your Mortgage can be a vehicle or tool to help you obtain financial freedom. For more information log onto www.apexbettermortgage.com. You can also email me at dwatterman@apexbettermortgage.com for more information.
Thanks for reading.
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