Excerpt
Mortgage Planning Strategies
The concept or idea of Mortgage Planning is to achieve the same goals as when planning any investment strategy. That is, of course, to realize the highest possible return on the investment.
It is unfortunate, but true, that most consumers do not treat their real estate investments with the same consideration and planning that they do on their other major investments. Stocks, bonds, mutual funds, IRA, 401K, employee retirement accounts, and trust funds are given a lot of thought and planning. People spend many hours going over strategies to assure the investment will provide the maximum return. They ask themselves how to best diversify a portfolio. Should it be stocks, bonds, mutual funds or possibly an annuity? What percentage to invest in growth? What about immediate income, and long term stocks? Should they look at municipal bonds or corporate bonds?
Each and every investment decision is given substantial and extensive consideration. For the average person, attempting to organize a portfolio without some modicum of professional guidance is considered imprudent. Even the most seasoned investor needs to consult with a specialist from time to time and, be assured, when they fist started investing they consulted with that specialist frequently.
Investment Planners or Financial Planners are essential in assisting each individual to better understand their financial needs and the abilities to meet those needs using available resources. The average person could possibly lose hard earned money trying to build an investment portfolio or manage their own financial programs without professional direction. An investment specialist has a solid understanding of the myriad of programs in the sea of investments and how to best navigate those potentially hazardous waters without running around.
Typically, the average person at age 40 has about $20,000.00 in an IRA, maybe $40,000.00 in a company 401K and savings of about $15,000.00 if they've planned well. They have spent time consulting with a financial planning specialist and have considered their options for growth and income. With careful planning and a bit of luck they may realize a return on their investments of between six and 8 percent.
Why then, when those same consumers spend $350,000.00 on a real estate investment that will grow at between 15 and 20 percent per year, are they willing to go without any professional investment counseling at all? The average borrower will typically walk into a bank and say, "Give me your best rate on a fixed 30 year mortgage." More often than not, the average loan officer is going to give him what he requests without asking the essential qualifying questions. The resulting loan may not be what's best for that individual's needs. By asking the borrower questions with reference to his specific needs and requirements, that banker may have been able to save the borrower hundreds of dollars per month in unnecessary interest. The resulting savings may have enabled him to afford a larger of more desirable house.
