Finalise Finances



Financing is the Key
The property investor and author Jan Somers, who wrote 'The Australia Investors Guide to Making Money' and 'Residential Real Estate' stresses that finance is the key to any investment property proposition. She stresses that the creative use of collateral (or borrowings) is essential to the growth of wealth through property. Most people today have achieved great wealth by using other people's money (OPM) rather than using their own money.


Finalise your Money Now
By now you have given your application to your bank or lending institution and have received approval for the loan on the property. Because the deal has now been negotiated and completed, the only thing left is settlement.

You need to finalise your finances now and move the cash over to your lawyer for the final payment on settlement date. The amount of money you have borrowed, plus your available cash, should meet the cost of the purchase, as well as the borrowing costs, plus selling costs. The selling costs include the realtor's costs, your solicitor's costs, any renovation or repair costs necessary, the costs involving the mortgage, any interest payments needed up front and any promotion costs.


Using Mortgage Brokers
A mortgage broker in the USA is like any other broker, except that they deal in mortgage finance. Their job is to find the best finance deal for you, as a client. A broker usually deals with a number of finance companies that provide this type of financing and it is his/her job to look at each option and come up with the best deal for you. They save you a lot of time you would normally spend hunting for the right mortgage. They have access to data from many banks and lenders, so they can "put their finger" on two or three options you should consider.

The important thing is to get a mortgage broker who you feel will look after your interests. They should not be pushing a mortgage from a company they prefer (because they may get the best commission) but should be putting before you the mortgage they believe suits your circumstances as well as your budget.

You should look for a mortgage broker who is a member of the Mortgage Brokers Association of your country or area because they are a professional body, with members subject to rules anmd regulations (and standards) in relation to the service they provide.

Brokers get paid by commission and this commission is not due until the deal is done and you have signed all the mortgage documents required. If they come up with a suggested mortgage choice, ask them why this is best and find out their reasons behind their choice. You need to feel comfortable that the mortgage you are considering is the one you should accept.


Using Gearing (or Borrowing) for Buying

Gearing is borrowing money for a purpose, such as investment. By adding borrowed money to your own funds you can increase the total money available to use for a particular investment purpose. Therefore, gearing simply means borrowing. It provides an opportunity for you to increase your investment income and accelerate the value of your investments over time by using other people's money (OPM)