Many investors consider mortgages necessary evil. However, in my personal opinion that doesn’t have to be the case. Long-time industry stalwart and consumer advocate, George Markoski offers these five key insights to enlighten the dark world of mortgages.
- Mortgages are a tool for wealth creation
People invest in property for different reasons, but the main one is wealth creation. They buy property on the grounds that it will go up in value.
In order to accomplish that, they need a mortgage. And their appetite regarding finance will be dependent on how they are sitting with their portfolio at any given point in time.
- Mortgages create opportunities
The initial deposit you put on a property becomes the first step towards retirement, because the value is going to grow from there. And from value come many opportunities.
They way to get more value is to pay down the mortgage in order to maximize the natural capital gain of the property. This will allow you to access the value to purchase other assets.
- Choosing the right lender is important
Which lender you go to is of utmost importance – given the fact that there is a large variety of them available.
You want to partner with someone who is going to pave the investment road with you. Depending on whether you investment strategy is long-term or short-term, it may not just be one institution that you partner with.
- Mortgage flexibility can be far more valuable than low interest rates
- People usually focus on the interest rate because it’s so evident – right in front of your eyes.
- But flexibility is a big factors because it offers you options and choice – especially for first-time investors.
- Keep in mind that the more properties you have – the higher the rate premium you will pay.
- The real cost of a mortgage is within the comparison rate
Try to look past the quoted interest rates. Instead, focus on the comparison rate because it’ll include all the charges and fees that you will have to pay – revealing the true cost of the mortgage.
George Markoski Positive Property Solutions Adelaide