Simple Mortgage

Mortgages come with a wide variety of options, what do you do?  It's simple.  Keep the mortgage very simple.  It will be easy to manage, set goals  (Im not kidding)   Often a complex mortgage will slow you down. 

Rule No. one - always start with the simplest mortgage and slowly add features to the mortgage. There are many mortgage features to look at 

• Offset accounts
• Splitting accounts
• Fixed or variable
• Interest only
• Portability
• No fees, some fee?
• And many more

I always recommend that you contact a mortgage broker when looking at mortgages and find out what options are available. The first thing a mortgage broker will or should ask you to talk about yourself and lifestyle.  A mortgage is fitted to the client not the other way around 

• Employed/self employed/
• What legal entity, if in a business.
• How much money comes in a month
• Do you need to hold cash for periods prior to paying
• What profitability or salary take home do you have
• Married/single/in between
• Financial position: pension funds, superannuation funds, investments
• Financial goals over next 5 to 10 years
• What personality are you, do you like details or big picture etc

With that information the mortgage broker can suggest a loan. 

Remember the standard variable mortgage is good for 90% of the population. What would cause you to have other options?

Split in a loan   (multiple accounts)

• Partners in an investment may split the loans up for each partner. 
• Each partner is free to pay off their own portion  loan at the speed  with which they are comfortable.
• Its easy to keep track and account of who owns the property, rather than with a single account.

 100% Offset Account   

•  A Person has a business and needs to store money over periods.
• Would they set up a number of 100% offset accounts to keep the money separate? 
• It makes accounting easy and gives the business owner control over then various funds. 
• It allows the stored funds to be uses to reducing of the balance of the mortgage. 
• keeping the business and personal account separate.

Interest only vs. Variable    

• The mortgage owner needs to be able to access all the principle payment. 
• When all the principle payments need to come out,
• an interest only structure would be used.
• If it was a principal and interest loan only the payments above the minimum monthly mortgage payments would be able to be with redrawn from the mortgage.

There are countess variations to a mortgage.  In all cases contact a mortgage broker and ascertain your needs and then move forward.  But always remember a simple mortgage is a good mortgage.

John E Edwards has written many articles, given countless talks on a mortgage is a wealth creation tool. It is what youdo with the tool that important. He is active in the finance industry.Contact To get moving on your first step contact a broker now. http://www.mortgagesolutions.home-equity.com.au