Make Sense of Mortgages and Real Estate

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Physician's Money Digest, May 2006, Volume 13, Issue 5

The real estate and mortgageindustries are notmutually exclusive. In fact,one cannot exist withoutthe other. Therefore, whenyou find a realtor who understands yourspecific needs for a home or new office,you'll also need to find out if they workwith a mortgage professional who understandsyour unique financial situation.No team of agents will be more crucialto your success in real estate than that ofa seasoned realtor and specialized mortgageprofessional.

Most realtors will have partnershipswith mortgage professionals, but it isimperative that the mortgage professionalhas experience working specificallywith physicians, as your needs may varyfrom other borrowers.

Before You Make an Offer

Your realtor ought to know the "layof the land" or the most desirable areasto live or work in a particular community.Based on their experience sellinghomes and commercial properties inyour targeted community, your realtorwill be able to provide you with informationsuch as duration of time housesspend on the market once they're listed,comparable values of homes in thatarea, and other significant demographicsof the neighborhood. Armed with thisknowledge, they are able to collaboratewith the mortgage professional to establishprojected equity in a property.

Next, you'll need to determine yourdown payment. Too many times inexperiencedrealtors or mortgage professionalswill encourage physicians toput down as much as possible. However,a team of a realtor and mortgageprofessional who specialize in workingwith physicians may discouragethis for a few reasons. As a physician,you likely have a lot of school loans topay off. Moreover, there is a great possibilitythat at some point you maywant to open your own practice orexpand your current practice. Andthere is a strong probability that yourannual income will increase as yearspass. For these reasons, making a largedown payment may not be in yourbest interest. Maintaining maximumliquidity of your earnings may be abetter bet for you.

Lastly, your realtor and mortgageprofessional will work with you to determineboth your long-and short-termplans so that they can recommend thebest financing options. To do so, thisskilled team will take into account all ofyour goals and aspirations pertaining tothe future of your residence and/or youroffice, and recommend the most lucrativeloan options for you.

Maximize Your Mortgage

Once all the paperwork has beensigned, and you're comfortable in yournew property, you may notice that yourmortgage has been structured such thatyou are saving money, and you stillhave a lot of liquidity. At this time youshould consider involving your mortgageprofessional in your debt reductionstrategy to help maximize your taxdeduction, as well as help you strategizefor paying off accrued debtthrough your mortgage loan.

In the future, your team of realtorand mortgage professional will serve astrusted advisors who know yourunique history, and will be able to helpyou reinvest the money that you haveon hand or the equity you've gained inyour home or office to your maximumbenefit. Real estate is a limited commodity,and should certainly be consideredone spoke in the wheel of yourlong-term financial plan. Equally asimportant is the proper managementof the mortgages on these properties. Itjust may be the ticket to efficient debtreduction and the door opener to otherlucrative investments, including futurereal estate purchases.

Ron Roth is the founder of Los Angeles,Calif-based Premier Realty, a boutiqueagency specializing in serving clients inhigh-profile medical positions. He hasassisted physicians with their real estateneeds for more than 15 years. He welcomes questions orcomments at 818-509-1111, 818-509-1114 (fax), or ron@ronrothhomes.com. For more information, visit www.ronrothhomes.com. Scott Yonehiro is a senior board memberof First Security Lending in Burbank, Calif. First SecurityLending was recently voted "Best Mortgage Company" bythe Los Angeles Times' Burbank Leader for the 6th year ina row. He welcomes questions or comments at 818-841-2995 x1835 or scott@firstsecuritylending.com.