| An interesting concept is being put
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| | 4.Putting extra money toward your
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| forward by a company called Global Equity
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| | mortgage is like putting it under the
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| Lending which,according to them,is rooted
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| | matress.
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| in the fact that building a secure
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| | To back up his claim,Edelman offers five
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| financial future is more difficult
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| | distinct reasons why you should carry a
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| thanever.The rules are changing and
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| | long loan:
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| perhaps the old practices need to be
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| | 1.Mortgages don't lower your homes
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| revamped.GEL calls its newphilosophy,
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| | value.Your home will grow in value
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| "Harnessing The Power of Your Mortgage"
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| | whether or not youhave a mortgage.
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| In 2004,credit card debt accounted for
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| | 2.Your mortgage is the cheapest money
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| over half of the $2.1 trillion of
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| | you'll ever buy.Why pay credit card at
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| consumer debt in the U.S.,quadrupling
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| | 18%,whenyou can borrow at rates under 7%.
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| over the last decade.Today,the average
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| | 3.Your mortgage is the best way to lower
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| American household has $9,000 of credit
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| | your taxes.There aren't many tax breaks
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| carddebt at 16% interest.To pay that
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| | left.
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| average off,at that interest rate would
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| | Mortage loans,unlike credit cards and car
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| take ten years,totaling over
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| | loans are fully tax deductable.
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| $8,000 in interest when all is said and
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| | 4.You should get cash out of you house
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| done.The financial impact of this,which
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| | while you still can.You may find it
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| is virtually unrealizedis devastating.GEL
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| | difficult toget a loan if something like
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| claims to have a better way.Their
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| | a loss of job comes up.
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| thinking is that since you must borrow
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| | 5.Mortgages become cheaper over time.Most
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| moneyover the coarse of life,why not
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| | times your payment will stay the sameover
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| borrow it as inexpensively as
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| | the years while your income rises,making
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| possible.Credit cards,auto
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| | it easier to pay over time.
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| loans,andpersonal loans are all high
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| | To further illustrate their beliefs,GEL
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| interest and non deductable.So why not
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| | presentations include a case study
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| harness the power of yourmortgage?
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| | called,"The Tale of Two
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| According to GEL,Americans operate under
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| | Brothers", where they do a financial
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| a mindset,when it comes to personal
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| | comparison of two fictional brothers.In
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| finance,thathas been burned into our
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| | the story,Brother A,ashe is called
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| country's psyche from the days of the
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| | follows the "old" way of thinking,while
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| great depression.That philosophyis as
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| | his brother(yes,you guessed it,brother
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| such:First get the lowest rate
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| | B)uses
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| mortgage,then,set up a bi-weekly payment
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| | GEL and Edelman's theory.The results of
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| plan,and,wheneverpossible send in
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| | the study find Brother B with almost a
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| additional payments.This way you pay off
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| | one million dollaradvantage over Brother
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| your mortgage as soon as possible.
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| | A.The full hypothetical can be viewed on
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| Sound good to me,right?Well,much to my
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| | but thejist is that the second brother
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| suprise,this company claims that is
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| | used the money he saved carrying an
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| exactly what weshould NOT be doing!On the
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| | interest only loan,or GEL'sfamous "power
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| contrary,their idea is one which is
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| | option"loan to invest in other
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| echoed by New York Times Best
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| | places.That,combined with the mortgage
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| Selling author of "The New Rules Of
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| | tax breakslead to the million dollar
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| Money",Rick Edelman,who says,"You should
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| | separation after 30 years.
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| get a big,30year mortgage and never pay
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| | So,if you believe in this new way of
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| it off."Edelman and GEL put rules forth
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| | thinking,and are ready to follow the
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| which read like this:
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| | model(in other words,
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| 1.Never send extra money to your mortgage
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| | REALLY, put that extra money to work for
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| 2.Stay away from bi-weekly plans.
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| | you),then I believe an interest only loan
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| 3.Make the smallest payment with the
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| | or GEL's poweroption loan is the way to
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| biggest tax break.
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| | go,but be careful.
|
