Mortgage And Grow Rich
* Becoming Financially Fit For Property Investments *

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At first glance, the title ‘Mortgage And Grow Rich’ might be a total impossibility. Borrowing is supposed to be a bad thing, isn’t it? So logically, shouldn’t a mortgage – possibly one of the largest loans one can take – be avoided at all costs? And how can borrowing make you rich?

To many people, the prospect of having to pay interest on the loans they take, and the need to service their loans through constant repayments towards the principal sum, are huge turn-offs that will deter even the most daring of men.

Yet, taking on a loan can lead one to financial freedom, and mortgage is one such example.

Mortgage – What Is It?

Commonly known as housing loans in Singapore, mortgages are what you take to finance your property purchases. These loans typically come with a tenure that can stretch until you are 75 years old. Thus, it is quite likely that for the next 35 years – assuming that you are purchasing your property at 40 – you may be forking out a few thousand dollars on a monthly basis to service your loan. And your loan amount can possibly start from a million and beyond.

Given such a huge loan amount and tenure, it is not difficult to see how mortgage is an instrument that can easily cut both ways. Being the double-edged sword that it is, how you manage your mortgage can determine whether your life turns out to be one of financial independence, or whether it becomes one of continual and endless financial burden. This is especially true in Singapore, where most of our assets are tied up in real estate.

But before you even bother to think about taking on a mortgage and investing in a property, the first question is: Are you even financially fit to take on a mortgage to start with?

Mortgage Readiness

For those of you who decide to embark on rigorous exercises such as running a marathon or taking up Mixed Martial Arts, the first thing that you do is not to sign up for the event or the course. Instead, you go for a health check to see if your body can handle the physical stress that comes with such activities.

During this check-up, doctors will ascertain your overall health status by subjecting you to a battery of tests. These tests include X-rays, blood pressure levels and your general heart condition. It is only after you have undergone such tests before they can give you a “go-ahead” to pound the 42-km pavement or take your opponent out with a flying side kick.

In the same way, if you intend to take on a mortgage and invest in a property, shouldn’t you put yourself under a rigorous financial self-assessment to determine your “Mortgage Readiness”?

Or specifically:

·         Are you earning more than what you spend, or is the reverse true?

·         Is your Personal Net Worth within the healthy range?

·         Are you over or under-leveraged?

·         How long can you last should you lose your income source?

·         Do you have too much “lazy money” that you can better utilise?

·         How much can you set aside for the property you want to invest in?

·         Given my current financial status, will the banks approve my loan?

·         How do banks assess my loan eligibility?

If you are unable to answer any of the above questions, it is time to do something about it, before you even proceed to think about taking a loan.

Financing Strategies

For those who are already financially fit and “mortgage ready”, the next question would be “Which loan to take?” If getting a mortgage is simply a case of walking into the bank, talking to the banker and signing on the dotted line, there would be really nothing much to write about. Yet, every loan is different and so is each individual investor. So before you jump at the next most attractive loan package, ask yourself:

·         Are you acquiring the property for investment or do you intend to stay in it for the long term?

·         How long will I be tied down to the loan after I take it?

·         Should I go for a shorter amortisation period or should I go for a longer one?

·         When should I reprice or refinance my current loan?

·         I have equity tied up in my current property. Can I unlock it?

As you can see, taking on a mortgage requires much thought and planning. Have you seriously thought through your financing strategy?

Or do you have no strategy?

Mortgage Planning The Holistic Way

As we have seen earlier, a mortgage loan is a long-term liability that must be planned for and managed properly. It is the proverbial double-edged sword that cuts both ways, and as an individual who wants financial independence, you want to cut it in the way that favours you, not hurt you.

As such, mortgage planning must be done against the backdrop of holistic financial planning, and this leads us to the 4A Method™ to financial freedom. It is a Method which I have developed over my 18 years of financial planning experience. It is also the essence of a book which I have recently completed, entitled ‘Mortgage And Grow Rich'.   

This book will:

·         Outline methods of making money work for you and not being a slave to it. 

·         Define mortgage and its role in helping you finance your dream property purchase.

·         Unveil the secrets to the dynamic 4A Method™ and its ability to put you on the path to financial freedom.

·         Evaluate the finances you would need for the purchase. 

·         Reveal the financing strategies available for different types of purchases.

·         Provide precise, executable steps for you to save on your loan.

·         Illustrate how you can adequately protect yourself and your loved ones from the contingencies of life.

Packed with realistic examples and humorous illustrations, this informative book will be the most important resource you will need to be your ultimate mortgage and money manager. To find out more, click here for a free preview of the book.

An Informed Investor Is A Prosperous One

It is clear that mortgage and financial planning takes much thought and knowledge. Yet, information that is suitable and palatable for the Singapore context is severely lacking and absent.

As a financial adviser with 18 years of experience behind me, I strive to do my part in sharing the knowledge of mortgage and financial planning with the general public through as many conduits as possible. Other than being the Creator and Chief Trainer for the popular program, 'Singapore Accredited Mortgage Planner', for real estate professionals and financial planners, I am also  a regular radio show consultant to the FM 1003 program ''星期二理财节目'. 

Writing ‘Mortgage And Grow Rich’ is another conduit for me to increase the financial literacy for all investors.  ‘Mortgage And Grow Rich’ is the guide towards managing and growing your finances.

It is time to take charge of your financial destiny by staying informed and updated. ‘Mortgage And Grow Rich’ is available at all good bookstores. Other than that, do check back at this site (www.alfredchia.com) frequently to learn how you can take charge of your financial destiny.