An Investment Real Estate Strategy Unknown To Most Is A Negative Amortization Loan
If you want to make the most of your personal or investment real estate, you should consider a negative amortization loan. Mortgage amortization is basically mortgage balance reduction. Consequently, when a mortgage has negative amortization, the loan balance not only is not reduced, it actually grows. So, why should you consider this? Simple. It is a great way to invest money from real estate someplace else.
This is a very aggressive and fairly unknown approach to real estate investment. In fact, it is a method of investing that does not have to involve real estate, in usual way we consider real estate investing. In other words, a negative amortization loan can give you money to invest in areas other than real estate, and this is how many people use this type of loan.
Let's assume your mortgage has a conventional loan that calls for a monthly payment of $800. If you refinance to a negative amortization loan, your payment may go down to $400 or less, leaving you $400 or more each month to invest. Now, keep in mind, your mortgage balance is actually increasing with this loan, because you are not paying the required interest, and it is being added to your principal balance.
However, imagine having an extra $5,000 to $6,000 each year to put into a high-yield stock or mutual fund. After five to ten years, this could turn into a very lucrative strategy.
Remember, it is important to consult with a financial advisor, before attempting this loan and this strategy. You might also consult with the wealth-building system, Winning the Mortgage Game.
Mark Barnes is an investment real estate and real estate finance expert. Get his free mortgage finance course at http://www.winningthemortgagegame.com and learn more about his wealth-building system. Mark is also the author of the new novel, The League, a shocking, sports-related conspiracy. Learn more about his suspense thriller at http://www.sportsnovels.com
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