-30 Year vs. 15 Year Mortgages
Discussion of the Asher Institute Report, entitled “Profiting From the Banking Industry’s Biggest Secret.” Copyright 2003. The Asher Institute is a non-profit consumer advocacy organization. www.asherinstitute.org
Who agrees with what the report proposes? What are some alternative points of view that may conflict with the point of view expressed in the report?
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The equity in your house is a mirage, its not doing anything just sitting in your house. Leverage it! Understand how high net worth individuals go through life: liabilities are a strong element on their balance sheets. Its all a play of arbitrage, leveraging your debt to acquire assets and increasing your rate of return in other asset classes. This is also what is known as “velocitizing” your money.
From this Report, you could have 2 primary objectives:
• 1. Pay less interest to the bank…….OR
• 2. Leverage your equity and/or extra money you are paying each month in other asset classes. (The money you are putting toward the 15 yr mortgage on the property, if you could put that toward an investment that is making more than the interest you’re paying, you’d be making more having the money working for you. i.e. arbitrage)
Posting from Chad Albury, C.F.O. of Bray-Conn Inc. and C.E.O. of Albury Investments, LLC on the topic Real Estate: Alternatives to the Traditional Mortgage
Thursday, May 15, 2008
Real Estate Investing-30 Year vs. 15 Year Mortgages
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For those people that are willing to become educated on what a good investment is, I can see that it would make sense to leverage your equity in that way. After all, equity is not real if it's not being utilized. However, not everyone knows what they are doing when it comes to investments, so it may hurt them more than help.
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