• Home
  • Books
  • About Lloyd
  • Media Center
  • Reviews
  • Blog
  • Contact Lloyd

Blog Post

05
JUN
2013

The Four-Step Mortgage Process

Tags : A Plan for Life, Beyond the Closing, Case Studies, Economic Impacts, Interest Rates, Media Events, Mortgage Products, Personal Finances, Proactive Mortgage Management, Scenarios that Work, The Mortgage Process, The Number, Your Mortgage Team
Posted By : Lloyd Streisand
Comments : Off

This Four-Step Mortgage Process was originally developed by my associate, Jim McQuaig, from Churchill Mortgage in Northern Virginia. The process is simple in concept: When you select a mortgage for your purchase, ensure that the mortgage product you select allows you to accumulate reserves.

1. Build a safety reserve

The first rule ensures you will have an emergency reserve for those times where you have an immediate need for cash to meet an unexpected expense. An example would be the need to replace four automobile tires that were destroyed in a road accident. This could cost as much as $1,000, and if you have no safety reserve, you must find other resources, and usually these are expensive (credit cards are one example). So an emergency reserve totaling three months of income avoids the need to use expensive resource alternatives.

2. Pay installment or revolving debt

The next step involves not having credit card debt because it is expensive and if your mortgage payment does not provide for some flexibility then you may be inclined to use credit cards to purchase assets that a more liberal mortgage payment may not require. Also, if there is credit card debt then a mortgage program should be selected that would generate cash flow that would allow the complete elimination of that debt.

3. Accumulate liquid assets

The general approach of the Four-Step Mortgage process ensures that you accumulate funds for emergencies or unexpected life events. We suggest that a year’s worth of earnings be saved. The purpose of this money is to have a cushion to shield against a larger negative event, such as losing a job. It can sometimes take a considerable amount of time to find a new job, so if you have these funds in reserve, you will be able to work your way through this stressful period in a comfortable manner. The mortgage product selected should help you build these reserves.

4. Own your home but with a mortgage

Lastly, you should own your home with a mortgage. This allows you to maximize the tax advantages associated with the mortgage interest deduction. We have discussed how this can be valuable in reducing your overall tax obligation. Each individual or family will have particular needs, but the Four-Step Mortgage Process incorporates and facilitates the central idea of building wealth through the use of a mortgage.

Social Share

  • google-share

Popular Topics

5-Step Mortgage Power Process Annual Review A Plan for Life Asset Position Beyond the Closing Case Studies Due Diligence Economic Impacts Financial Goals First-time Homebuyer Individual Needs Interest Rates Life's Circumstances Media Events Mortgage Products Personal Finances Proactive Mortgage Proactive Mortgage Management Scenarios that Work The Mortgage Process The Number The Streisand Team Your Mortgage Team

Latest Blog Posts

Mortgage Power - The Introduction To My Book

March 24, 2015

Mortgage Power Example - Investing $100,000

March 24, 2015

Interest Rates Are Trending Lower

March 19, 2015

Mortgage Power

Mortgage Power - An Asset in the Making is for the typical homeowner, although real estate professionals, accountants/financial planners, and attorneys will also find it valuable. In Mortgage Power - An Asset in the Making, I illustrate how to use your mortgage to tap into and leverage the inherent value in your home. When you finish reading Mortgage Power - An Asset in the Making, you may feel that you have garnered a new power to accumulate wealth, and you have—“Mortgage Power.”

Popular Topics

5-Step Mortgage Power Process Annual Review A Plan for Life Asset Position Beyond the Closing Case Studies Due Diligence Economic Impacts Financial Goals First-time Homebuyer Individual Needs Interest Rates Life's Circumstances Media Events Mortgage Products Personal Finances Proactive Mortgage Proactive Mortgage Management Scenarios that Work The Mortgage Process The Number The Streisand Team Your Mortgage Team

Contact Lloyd

  1. Name *
    * Please enter your name
  2. Email *
    * Please enter a valid email address
  3. Message *
    * Please enter message
Site design by:abcmediasolutions.com