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Mortgage management made easy By Melissa Wirkus

Understanding the mortgage process can be a very confusing subject, but it doesn’t have to be.
Whether you have bought ten homes, or are embarking on your very first home buying and mortgage transaction, taking out a loan can be quite overwhelming.
But understanding the process is not rocket science, it just takes a little research and homework.  In fact, if you feel this way, you are definitely not alone, since the majority of people do not understand mortgages, loans or equity either!
But understanding how to manage your mortgage and home equity is something that will serve you for the better for years to come, and it is really not that difficult once you get down to it.
A November 9, 2006 article from Realty Times and posted on Yahoo’s Real Estate page, “How to manage your mortgage,” gives some helpful tips to borrowers who need some additional insight into the mortgage world.
The first thing that many borrowers do not understand is how beneficial a mortgage can be to their financial situation. Many are under the misconception that they should strive to pay off their mortgage, when in fact that is the last thing a homeowner should do.
Holding a mortgage allows access to equity and loans that enable the holder to invest in a variety of other wealth building opportunities.
“A lack of knowledge about mortgages and home buying in general may be causing many home buyers and owners to overlook the financial benefits of holding a mortgage. Some consumers believe its easier to program TiVo, do their taxes and understand the opposite sex than it is to understand the home buying process, according to a Harris Interactive poll commissioned by Countrywide Home Loans, Inc.”
The poll found that an overwhelming amount of people were completely in the dark about using their home as a financial management tool, and it also found that 91 percent of homeowners believed that home equity is an important management tool, but fewer planned to actually use it.
“Only 60 percent of those with equity would tap it at all, the survey found, which flies in the face of reports that home owners squander equity money on frivolous purchases. The survey found most of those who would tap their equity, 70 percent, would use the money only for home improvements, a worthwhile use if the improvement provides a good return for the money, but not the only use.”
There are countless ways to manage equity so that it provides beneficial results financially, such as taking out a home equity loan to make improvements on your home that will add value to it.
The most beneficial way to manage your mortgage is to use your equity for another investment or wealth building opportunity. The easiest way to do this is through refinancing or a home equity loan.
“Other approaches to managing equity as an asset include: Refinancing to use some of the equity to finance capital improvements, start a new business, pay for education or other low-risk investment likely to yield a return.”
“Using the equity from a first home to purchase a second home, provided the second home is affordable or is an investment property with a positive cash flow from rent or other use income.”
Understanding how to manage a mortgage will not only make the whole process a lot easier in the future, but it will also provide you with the tools necessary to make smart financial moves that create wealth.

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