There are now many mortgages
in Arizona that allow you to pay only the interest portion (rather than
the principal) for a period of time. A disciplined investor
can take advantage of these programs to lower their monthly mortgage
payments, maximize potential tax deductions and invest or use the payment
savings for other purposes.
Increasing your cash flow is a critical element of building your net
worth. An Arizona
mortgage with interest only payments can help increase your cash
flow by lowering your monthly mortgage payment. Funds that would have
originally been used to pay down your mortgage principal can be directed
to meet other financial
objectives.
With the redirected cash flow from your interest only payments you could
pay off higher-cost, nondeductible consumer credit; maximize contributions
to 401(k) or other tax-deferred retirement accounts; increase contributions
to an investment portfolio; or meet day-to-day expenses.
Investing redirected funds may help you build your net worth. If you
can save more and get a higher return your numbers can be even more
remarkable. For a married Arizona couple to save $10,000 a year is not
an easy task, however it is possible if they limit the luxuries that
they spend their money on. If they earn 10 percent annually on this
redirected cash flow, they will have $1 million in 25 years.
In order for it to work, you must be a disciplined investor however.
You must commit to investing the money each month, and not to spend
it on something else.