The Pros and Cons of the Access Bond

An access bond provides home owners a way to manage money and payments for their real estate property. It is a mortgage account that is flexible and simple to accomplish. The procedure involves the real estate owner, to have their salary checks deposited into the bond account. It lowers the mortgage’s outstanding balance, which in turn decreases the cost of the mortgage. It then results in the lowering of daily accumulation of mortgage interest. The time to pay off the mortgage is shortened and also allows you, the real estate owner, to have full access to the money in the account.

Most people around the globe are always looking for ways to save money on real estate purchases. Of course you can negotiate for the best price possible. However, there are also other ways to maximize your investment. You can implement many techniques to get the best deal in purchasing a home or real estate property but nothing can compare to the advantages of using it. There are pros and cons to the use of access bonds, and we will discuss them here as we go along.

Pros

One of the reasons for using it is to lower the daily interest rates of your mortgage. That is a given and obvious benefit to you as a real estate owner. Other advantages to the access bond is the accessibility to get cash from the account. You can use the money in the bond anytime you need it. If you need additional cash for living expenses, you can withdraw some money from the account. You can even use your home as collateral and take an equity bond using your house. However, this may not be the best thing to do because you will just be adding more monthly payments that you will be liable for. The great thing about access bonds is that it lets you withdraw money from the account with lesser interest to pay than a regular equity bond.

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Cons

Although accessibility to the cash in an access bond account is a good thing for emergencies, it still has some drawbacks. Every time you get cash from your account, it turns your home into collateral. It reduces the equity of your property. Although it may not bother you at this point you need the money, it will eventually take its toll when you decide to sell the property. The access bonds have to be repaid in full if you plan to sell the property. This may cause the value of your home to drop and not enable you to sell it at a good price.

You can get one when you take out a mortgage on your home. You can also do it after you get the mortgage. The qualifications to obtain an access bond may differ depending on the bank. Today’s economic situation and credit problems have made it harder to qualify an access bond. If you ever do qualify to get one, consider it as a tool to manage your mortgage payments wisely, not as a chance to keep withdrawing from it.