Mortgage Strategy 101 – Ep 3. Holding Property


Hello and welcome to episode 3 of
Mortgage Strategy 101. Today’s episode we’re talking about how your mortgage
strategy can help you to hold the properties you buy. Okay so we’ll just
start with the example the first-time buyer who’s buying a stepping-stone home
and would like to keep it as an investment property when they purchase
their future home. Okay so one of the great misnomer that we get taught
when we’re growing up which totally makes sense is to pay down your
homeloan as rapidly as you can. Now we agree with that but the problem
with doing that is you won’t be optimizing your tax deductions when
that first time becomes an investment property and you’ll have less cash to go
towards the future home which means you’ll be paying more non-deductible
debt on your future home. Okay so you can still achieve the same outcome of
paying off your homeloan as rapidly as possible but doing it via an offset
account that you do not touch. Alright so what we’ve got here is an example of
your loan structure and you’ve got the credit card if you have one, your
fun offset accounts for your fun spending, your life offset account for
your variable necessities and then the grow account and the grow account is the one
that you build up your savings within. So you’ll repayments go into your home
loan and instead of paying down your home loan as rapidly as possible what we
want to do is build up your grow account. Okay so you still might make principal
and interest but don’t make the extra repayments onto the home loan. Okay and
so that way as you’re grow account builds up over time and let’s say it got
up to $600,000 over time you’re still not paying any interest on your home
loan. So it’s the same as having paid off your home loan if the balance was $600,000
but the big thing is then that cash can go to all its funding your future home. So you don’t have to borrow as much on your future home and then your home loan and the let’s say you’ve been paying small principle and interest repayments and the balance is now $550,000
and it paid off $50,000 over the journey. Well you’re able to claim tax
deductions on the interest on the five hundred and fifty thousand and in this
theoretical example which should be pretty amazing but if you’d build up
six hundred thousand dollars of savings that could go towards a future home so that’s one of the principles of how your mortgage strategy can help
you to hold property. I hope that made some sense to you. If you’d like to learn
more about this, please contact us via our website or give us a phone call and
remember that your mortgage strategy is more important then your interest rate
to get right because you can still get an awesome rate after you’ve got your
mortgage strategy organized and it isn’t neglected by almost all mortgage
professionals. Have a great day and thanks for tuning in.

Paul Whisler

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