Saturday, December 09, 2006

Missing Your Fortune?

I have consulted with hundreds of homeowners and real estate investors during my twenty years in the mortgage banking industry. It is disputable that a personal residence is the largest appreciating asset for the majority of Americans and as a result the foundation of their financial security. As such the appreciation in your homes value coupled with a “proactive” strategy for managing the associated debt may result in the accumulation of wealth and a hedge against volatility in the financial markets. The idea of securing a 30 year fixed interest rate mortgage at the time of purchase and simply making the monthly payments is no longer the best means of creating financial security – you may in effect be missing your fortune.

In recent years a number of new mortgage products have been introduced to the marketplace including interest only loans and loans tied to a variety of indexes with varied rates and repayment terms. In my practice, I routinely have more than one potential solution for addressing our client’s short and long term needs. So where should you begin? I encourage all of my clients to participate in an annual mortgage review, consider this an annual physical for your home mortgage. Through this process we are able to measure our clients’ current interest rate against the market, determine what life changes have occurred that might affect the type of loan presently in place and make recommendations to ensure that we remain on course.

Technology has greatly impacted the mortgage banking industry by providing a number of tools to better allow professional mortgage bankers to more effectively manage mortgages over time. I utilize a number of tools to monitor interest rates relative to my clients present rate, hedge interest trends for clients with adjustable rates, determine when to convert an adjustable rate to a fixed rate mortgage and to monitor appreciation in property value to identify opportunities to put their equity to work. This method of value added service is known as professional mortgage management, which I created elevate the entire process of financing your home to more meaningful level.

To ensure that you have the most cost effective mortgage program and one that maximizes your ability to create long-term wealth consult a professional mortgage banker; preferably one who carries the CML designation from the Colorado Association of Mortgage Bankers. Utilizing a CML designated banker will insure that you are dealing with someone who is committed to continuing education and who is held to the highest professional standards in the industry.

No comments: