|
| |
| Strategic Equity Management  There are several reasons why purchasing a home is preferable to renting one. Rent payments go directly into the pocket of a landlord, while mortgage payments result in the accumulation of equity and the eventual ownership of the property. The tax advantages of home ownership are also significant since mortgage interest is tax deductible.
Ironically, these two benefits do not always work well together! Financial planning expert and best-selling author, Douglas Andrew, has revealed some surprising misconceptions as well as some innovative strategies in his book, Missed Fortune 101*. Andrew explains that most homeowners believe that paying down their mortgages quickly and increasing their equity is the best investment they can make. However, doing so results in a decrease in the tax benefits available since the loan is paid off sooner, causing the interest deductions to disappear.
As an alternative, Andrew suggests that homeowners obtain a fixed-rate, long-term mortgage. Rather than putting down a large down payment or paying extra principal, he recommends placing these funds in a carefully chosen investment vehicle that will earn a higher rate of return. By using the tax benefits of the interest deductions and the compounding of interest on the investment account, homeowners have the potential to earn a higher rate of return. In addition, should an emergency need for cash arise, the investment account will be much more liquid than the equity of the home.
* Missed Fortune 101 is available in local bookstores and through Amazon.com.
| | Mortgage Interest Rates* | | Rates as of 01/22/2007: | | | Conforming | APR | Payment per
$1,000 | Jumbo | APR | Payment per
$1,000 | | 30 Year Fixed | 6% | 6.231% | $6.00 | 6.25% | 6.352% | $6.16 | | 15 Year Fixed | 5.75% | 5.968% | $5.84 | 6% | 6.173% | $6.00 | | 5 Year ARM | 5.875% | 6.092% | $5.92 | 6% | 6.184% | $6.00 | | 5 Year Interest Only ARM | 6% | 6.137% | $5.00 | 6.125% | 6.239% | $5.10 | | 30 Year Interest Only | 6.25% | 6.346% | $5.21 | 6.25% | 6.391% | $5.21 | | | | *Rates are subject to change due to market fluctuations and borrower's eligibility. | | Georgia Residential Mortgage Licensee #21471 | | |
|
1 Comments on Mortgage Rate Update
Leave a response…
|
|
|
|
Ramsey Yount
Atlanta,
GA
More about me…
Signature Lending Group, Inc
Address: 1000 Hurricane Shoals Road, Suite C-330, Lawrenceville, GA, 30043
Office Phone: (678) 387-5580 x 3
Cell Phone: (404) 514-4944
Email Me
 Links
Archives
|
|
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
© 2009 ActiveRain Corp. All Rights Reserved
;)
;)
Strategic Equity Management
By Heidi Rivas, President & Senior Loan Consultant
(Published in the June Edition 2006, Magazine of Santa Clarita)
There are several reasons why purchasing a home is preferable to renting one. Rent payments go directly into the pocket of a landlord, while mortgage payments result in the accumulation of equity and the eventual ownership of the property. The tax advantages of home ownership are also significant since mortgage interest is tax deductible.
Ironically, these two benefits do not always work well together. Financial planning expert and best-selling author, Douglas Andrew, has revealed some surprising misconceptions as well as some innovative strategies in his book, Missed Fortune 101. Andrew explains that most homeowners believe that paying down their mortgages quickly and increasing their equity is the best investment they can make. However, doing so results in a decrease in the tax benefits available since the loan is paid off sooner, causing the interest deductions to disappear.
As an alternative, rather than putting down a large down payment or paying extra principal, he recommends placing these funds in a carefully chosen investment vehicle that will earn a higher rate of return. By using the tax benefits of the interest deductions and the compounding of interest on the investment account, homeowners have the potential to earn a higher rate of return. In addition, should an emergency need for cash arise, the investment account will be much more liquid than the equity of the home.
Equity earns a zero percent rate of return. Regardless of whether you own your home free and clear or have it mortgaged to the hilt, your home will appreciate at the same rate as your neighbor. This strategy can generate significant long term wealth for you and your family and is definitely a very prudent financial decision.
I encourage you to consider this Equity Management Strategy when purchasing or refinancing a home. I invite you to contact me to discuss how you can best take advantage of this proven strategy to optimize your assets and create wealth.
Heidi Rivas, President and Senior Loan Consultant of LoanGal.com, a Crown Home Loans company, is one of the leading mortgage originators and strategists in the nation. Visit Heidi Rivas at http://www.heidirivas.com/
--Moderator