Your Mortgage, a Great Place to Invest
If you are a homeowner looking for a wise investment opportunity, you don't have to search very far. Real Estate is one of the greatest investments you can possibly make, and if you already have a mortgage on a home, putting in more money than the required payments is a wise decision. Every dollar paid towards your mortgage gives you more equity in your home, and that equity is almost guaranteed to rise in value. If you were to invest in a stock, your hope would be that the value of those shares would increase, and with real estate, it is only a matter of time before the value goes up, but even if your home does not increase in value, the sheer numbers of paying a mortgage early produces an incredible return. An investment made in your own mortgage is safe, easily accessible, tax free, and almost guaranteed to pay off at a great percentage. If you are considering a new mortgage, the same is true. Not only is it a great investment opportunity, but it will provide a home in the mean time. How many stock options can do that?
If you have a mortgage and a little extra money left over for investing every month, putting that money back into your mortgage can give you returns of up to 200%. Who wouldn't take these kinds of numbers for investment? Not only that, but it is tax-free as well! Money saved in the bank or used on stocks, bonds, and mutual funds is all taxable income, while payments toward a mortgage is not considered income at all.
By paying a little extra on your mortgage every month as a long-term investment, you gain equity and lesson the length of the mortgage. Think of an example of paying an extra $25 per month on your mortgage. If your monthly payment is $665 over 30 years, at 7% interest, the mortgage would be paid off 39 months early. Multiply those 39 months times the monthly payment, and you get $25,935, and subtract this amount by the number extra monthly payments of $25 (321 months x $25 = $8025). This is a savings of $17, 910. If you divide these savings by 321 months, the monthly tax-free growth is $55.79. On a yearly basis, this is an average growth of $669.50, and when you divide that by the $300 dollar annual investment ($25 x 12 months) you can see that there is over a 200% return. Of course, the more you invest, the better the return.
This is not even taking into account the increase of the home's value. In some regions, homes have been known to more than double in value over a decade, and with the growing population this is only going to increase. By building this equity faster, you also open the possibility of borrowing money against the equity for other investments, like building another home.
Investing is your own mortgage is one of the smartest ways to provide for your future. Everyone knows that real estate is one of the safest investments you can make, so why not start with the mortgage you already have?
About the Author: Peter Dellane is the President of Ability Mortgage Group, LLC, A leading Maryland Mortgage company offering low costs zero point mortgages. For more information please visit www.marylandsmortgage.com.
If you have a mortgage and a little extra money left over for investing every month, putting that money back into your mortgage can give you returns of up to 200%. Who wouldn't take these kinds of numbers for investment? Not only that, but it is tax-free as well! Money saved in the bank or used on stocks, bonds, and mutual funds is all taxable income, while payments toward a mortgage is not considered income at all.
By paying a little extra on your mortgage every month as a long-term investment, you gain equity and lesson the length of the mortgage. Think of an example of paying an extra $25 per month on your mortgage. If your monthly payment is $665 over 30 years, at 7% interest, the mortgage would be paid off 39 months early. Multiply those 39 months times the monthly payment, and you get $25,935, and subtract this amount by the number extra monthly payments of $25 (321 months x $25 = $8025). This is a savings of $17, 910. If you divide these savings by 321 months, the monthly tax-free growth is $55.79. On a yearly basis, this is an average growth of $669.50, and when you divide that by the $300 dollar annual investment ($25 x 12 months) you can see that there is over a 200% return. Of course, the more you invest, the better the return.
This is not even taking into account the increase of the home's value. In some regions, homes have been known to more than double in value over a decade, and with the growing population this is only going to increase. By building this equity faster, you also open the possibility of borrowing money against the equity for other investments, like building another home.
Investing is your own mortgage is one of the smartest ways to provide for your future. Everyone knows that real estate is one of the safest investments you can make, so why not start with the mortgage you already have?
About the Author: Peter Dellane is the President of Ability Mortgage Group, LLC, A leading Maryland Mortgage company offering low costs zero point mortgages. For more information please visit www.marylandsmortgage.com.
Labels: maryland mortgage, mortgage maryland
1 Comments:
I git what you saying, but why should I put money in my morgage when I can invest it in stocks? you ever herd of Google, AOL, or Appel? I can make more money on then puttin in my morgage. Besides that, I git a tax rite off with my morgage, so why wood I pay it off early? The bigger the maorgage, the bigger the rite off. You feel me?
Post a Comment
<< Home