Discover How to Use your Mortgage to Create Wealth and Residual Income

September 5, 2008

Most people who buy homes get mortgages where they pay principal, interest, taxes, and insurance. They are taught that they must pay down the debt and have their equity--their investment--in the house.

Now, lets think about this for a moment. On a 30 yr mortgage with a fixed interest rate, most of your payment will go towards paying the interest with very little towards the principal. You dont start making a major dent on the principal until year 20 or so.

Second, by having the money in the home, is it working for you and making you more money? The answer is no! What happens if you need some of that equity for an emergency? You have to either get an equity line of credit, get another mortgage, or refinance to get cash. That money, your money, that youre borrowing, you will have to pay interest on it. Youre already paying interest on your mortgage but now youre going to pay payment to borrow your money?

Does that sound right?

NO!

Whats the solution you ask?

Here it is: You get an interest only loan and never pay it off--never pay off the principal.

You get the money out of the house. By not paying the principal, you use that principal payment--money you would have paid in a regular 30 yr mortgage--and invest it in a mutual fund thats earning you 8-10%. Your money then is working for you making you money.

Your money now becomes more liquid--you can access it easier and you dont have to pay interest on it when you want to use it, unlike a HELOC or a second mortgage. In essence, youre using the banks money to create wealth for yourself.

Youre probably wondering, how do I build equity? Do you know that the mortgage has very little bearing on whether or not your home will appreciate? Your home will appreciate regardless whether you pay down the debt or not. The thing to remember is that youll use your mortgage to build wealth. However, the key aspect to creating wealth is to invest regularly and consistently.

If you have not been thinking about harnessing your mortgage to create wealth, then this is your introduction to it. But first, learn about the new rules of money and how it affects your mortgage by visiting http://ezleadcapture.com/member/wlg.htm

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