Repayment or Interest Only. Which mortgage is right for me?

David shares his perspective on repayment and interest-only mortgages and explains what his current strategy is.

With an interest-only mortgage over time inflation can come to your rescue and with the pandemic causing a massive shock to the economic system, some expert opinions say that it will be inflation that will ultimately eat away at the debt.

The value of property goes up over time, rents go up over time but in effect, the value of the mortgage is less over time meaning inflation could be the magic element for your property portfolio moving forward.

KEY TAKEAWAYS

When you purchase property you are investing in bricks and mortar and hoping the value will go up over time

It’s a much more efficient use of your cash to go interest only

With an interest-only mortgage over time inflation will come to your rescue

There is huge pent up spending power, assets will be purchased and go up in value and this will eat away at the coronavirus debt

With inflation, property prices go up but if you have a mortgage debt  it  stays the same

You can follow the inflationary rise of the property and keep drawing money out as the value increases.

The value of the debt is eaten away by inflation

The value of the property goes up over time, rents go up over time but in effect, the value of the mortgage is less over time

Over time inflation will be pushing up the value of your property and in real monetary terms decreasing the value of the loan with rents going up

When you are property portfolio building interest-only mortgages are a good way to go

There is a magic in the effect of  inflation over time on your property business

BEST MOMENTS

I’m leaning towards inflation going up, I can’t see how it can do anything else

Asset inflation makes heroes of us all

I’ve seen significant inflation before

VALUABLE RESOURCES 

Property Sourcing Profits Podcast

https://www.progressiveproperty.co.uk/

https://unlimited-success.co.uk/

https://www.facebook.com/groups/progressivepropertycommunity/

Property Investors podcast

ABOUT THE HOST

David is a property expert with over 25 years’ experience and his own portfolio of 26 units. His current rent roll is in excess of £10k per month. He is also a partner in a Deal Sourcing and Packaging business in the North West of England and has sourced over 250 properties for investors since 2004.

In recent years he has, by necessity, had to develop an expertise in LHA strategies. This area is increasingly becoming a niche for him, and he enjoys empowering other landlords by sharing the knowledge he has gained.

The ultimate purpose when sourcing properties in this sector for investors is to minimise risk while maximising profit. He has had to find answers to the challenges of Tenant Find, Management, ensuring rents are paid and the transition to Universal Credit. These are strategies he uses in his own business and also on behalf of investors. His investor clients regularly achieve annual gross yields of over 20% with high occupancy rates and voids resolved, sometimes within hours.

CONTACT METHOD

https://www.linkedin.com/in/david-siegler-7b126316/

https://www.facebook.com/DavidSieglerInvestments/