Practical real estate financing advice that can creat wealth

Annual Mortgage Reviews Bring Borrowers Closer to Achieving Financial Goals

Yearly reviews are a great way to keep on track with your financial goals. You’re probably already meeting with your financial advisor and other asset manager for quarterly or annual reviews, and you should do the same with your Mortgage Planner as well. An annual mortgage check-up is an ideal way to make sure your mortgage is still having the maximum positive impact on your overall financial plan.

A lot can happen in one year. The market can take turns that can open up new opportunities, such as reduced interest rates, new loan products or changes in home values. Furthermore, your personal and financial situation could be mildly to radically different than it was just 12 months prior. Perhaps one or more of the income earners got a raise or lost a job. Maybe you received an inheritance. Even a minor, one-year change in one of your kids’ college plans could impact your financial situation in a way that would benefit from an adjustment in your mortgage strategy.

Periodic reviews serve several purposes. First, they establish a consistent path toward achieving your financial goals. Secondly, they ensure that you stay on track with your goals. Sometimes plans need minor adjustments, but without the knowledge that comes from a thorough evaluation, those minor adjustments may go unnoticed. Often, by the time an adjustment becomes apparent, you may have already lost valuable time and/or resources that could have been spared with a few minor modifications along the way. Finally, periodic reviews help to keep you accountable toward your commitment to achieve your objectives. Without accountability, it’s very easy to let your savings and investment actions fall by the wayside, especially when unexpected expenses arise. Knowing that you’ll be discussing your action steps will help to keep you committed to your goals.

Consider scheduling a periodic review with your Mortgage Planner in conjunction with your asset manager’s review. In addition to saving time, you’ll also gain the advantage of your own personal management team for your financial asset-building program.

Remember that getting clarity on your financial situation is never a waste of time. If you find that your current financing is more desirable than the financing that is available in today’s market, you’ll know that your Mortgage Planner did a great job advising you last time. If you find that your changing circumstances have dictated that a new loan will better suit your new situation, your Mortgage Planner can bring you one step closer to achieving your financial goals.

She approached me with an interesting question

should I pay for the house all cash or should get a mortgage since I making a nice profit of the house I am selling?

Now this is a Question we right away jump and say No don't pay for the house entirely all cash Just get a mortgage. after all this is what we sell our livelihood we are mortgage brokers our name will predict our answer!

But what is the right advise to the client?

What I answered to the client after taking every detail of her income and assets was, that  being that thats all the money she has, she should not dump all of it into the house. It will be very easy to put it all in there, but not as easy to retrieve it since she is retired. Now of course a reverse mortgage is always an option but how much she can take out will be determined based on life expectancy, and will not be a fast process!

Therefore I suggested to speak with a financial planner and to determine how much income she can realistically generate with the cash she has on hand, and based on that to determine how much of a conventional mortgage can she support with her total income.

What we will have accomplished

1) We have access to the money and principle at all times.

2) if the house goes down in value she still has her capital

3) We just reduced her tax liability on her total income since she has mortgage interest to deduct.

Sincerely

Joel Silberstein

PS. Of course there are other ways but I just wanted to point out this strategy