#27 Your Mortgage as a Financial Tool



You have been successful in your hope for a home of your own– and that’s because you were successful at qualifying for and acquiring a Home Mortgage loan!  While you were moving through that detailed process, it’s unlikely you had much time (or inclination) to think about other future benefits that having a Home Mortgage could bring.   However, after a little time goes by, and after you have accumulated significant equity on the property, your good record of keeping current with your Mortgage loan payments leads to some excellent new opportunities!

Now you have an interesting personal choice:  You can join the ranks of the moaners and groaners who (after wanting it more than almost anything!) can complain each month about having to make the Mortgage payment!    OR... you can read on and learn about some of the good opportunities and advantages that holding a Mortgage brings – other than the obvious one of now buying your own home!

Having qualified for and acquired a Home Mortgage, you now also have a financial tool that can serve you in many ways – some (maybe all) you never thought about.   The most obvious advantage of being a Mortgage holder is the plain fact that it is just about the best indicator of stability (financial and otherwise).   When job seeking, it speaks loudly to any prospective employer that you are going to be responsible on the job because you have substantial positive obligations.   

Not only does holding a Mortgage indicate stability, it also signifies an interest in investing in the community of your choice through your property tax contribution.  If you are a family with children, buying a home in the area of your choice also represents an investment in the local school district.  Those two facts alone are indicators that you (or you and your family) care about commitment, fulfill your obligations and are a stable and welcome addition to the property owners of the community!

Showing that you have a Mortgage is the best item on your Credit report!  And it certainly can be a plus element for another purchase – assuming all other factors would be in order.   Your Mortgage carries the most positive weight in the calculation of your Credit Report!  Along with the rest of your healthy Credit (which helped qualify you for your Mortgage loan) you are positioned for many advantages.

As time goes by and your property gains Equity, you will have the opportunity to use that equity value for other purposes.  Thus, the property you are paying for becomes itself a new source of revenue.   For instance, one could draw the equity value on one property to use as the down payment on another.  Or, you could use such funds to offset the costs of one of your children in college; or to pay off a more expensive debt.

There are also Tax benefits when you hold a Mortgage!
Because of recent changes in the tax codes, it would be wise to consult with your personal, professional tax expert concerning Mortgage benefits.

There is another future benefit further down the line for individuals who hold a Mortgage:  A Reverse Mortgage!   It works like this:  In your later years, retirement years, you may have the advantage of borrowing from your equity.   In that way, you can enjoy further benefits from your original investment; and you do not have to “pay it back,” as long as you continue to live on the property.

As you can clearly see, carrying a Mortgage is a good thing in many ways!   Some of these benefits require strategic planning.  There is excellent informed help available where you may learn in more detail about the opportunities mentioned above.  Call your Lender and just ask!

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