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Mortgage Planning: Step 4
Pay off your mortgage
This is where Mortgage Planning differentiates itself from the rest of the mortgage industry. Most people dream of someday having their mortgage paid off. For many, this is an unattainable dream and it seems that more and more people are starting to doubt they will ever be able to have a mortgage burning party. Most would define “having their mortgage paid off” as not having a mortgage. That is one way to look at it. But wouldn’t it also be true that if, for example, you had a $400,000 mortgage and you also had $400,000 in the bank. If so, wouldn't you, from a balance sheet perspective, have your mortgage paid off? This raises some very interesting questions and opens up some powerful opportunities for our clients. There are three areas we would like to address under the heading of “paying off your mortgage”. They are: Down payment Principal payments Home Equity In looking at the 4-Step Cash Flow Priority Model, we said that our monthly cash flow should first go to developing a cushion, then to paying off all non-preferred debt, then to liquidity/savings, and finally to paying off the house. Does it make sense to make a down payment when buying a home, or to get a loan that requires principal payments? And when you are refinancing, does it make sense to leave equity in the property if you have other debts or lack liquidity? Pause for a moment...this is where you must start the process of making a critical paradigm shift in your financial habits (a.k.a. financial values). This is the most important concept we talk about in advanced equity management strategies…simply put, you must be committed to CONSERVE, not CONSUME your equity!! The effective management of home equity along with consistent long-term financial discipline, can be the key to financial independence for you. Ineffective money-management and lack of financial planning can spell disaster. This is why we require that you be aligned with a financial advisor who will assist you in developing, implementing and monitoring the investment side of your mortgage plan. We do 100% purchase transactions and cash out refinances for clients to consolidate debt and free up cash flow to begin the habit of investing with the advice of a certified financial planner.
In looking at the 4-Step Cash Flow Priority Model, we said that our monthly cash flow should first go to developing a cushion, then to paying off all non-preferred debt, then to liquidity/savings, and finally to paying off the house. Does it make sense to make a down payment when buying a home, or to get a loan that requires principal payments? And when you are refinancing, does it make sense to leave equity in the property if you have other debts or lack liquidity? Pause for a moment...this is where you must start the process of making a critical paradigm shift in your financial habits (a.k.a. financial values). This is the most important concept we talk about in advanced equity management strategies…simply put, you must be committed to CONSERVE, not CONSUME your equity!! The effective management of home equity along with consistent long-term financial discipline, can be the key to financial independence for you. Ineffective money-management and lack of financial planning can spell disaster. This is why we require that you be aligned with a financial advisor who will assist you in developing, implementing and monitoring the investment side of your mortgage plan. We do 100% purchase transactions and cash out refinances for clients to consolidate debt and free up cash flow to begin the habit of investing with the advice of a certified financial planner.
Pause for a moment...this is where you must start the process of making a critical paradigm shift in your financial habits (a.k.a. financial values). This is the most important concept we talk about in advanced equity management strategies…simply put, you must be committed to CONSERVE, not CONSUME your equity!!
The effective management of home equity along with consistent long-term financial discipline, can be the key to financial independence for you. Ineffective money-management and lack of financial planning can spell disaster. This is why we require that you be aligned with a financial advisor who will assist you in developing, implementing and monitoring the investment side of your mortgage plan. We do 100% purchase transactions and cash out refinances for clients to consolidate debt and free up cash flow to begin the habit of investing with the advice of a certified financial planner.
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