This document provides an overview and presentation on the CMG Home Ownership Accelerator program. It begins by noting how previous generations spent their working years paying off 30-year mortgages, and that there may be better tools available. It then discusses trends toward smaller mortgage payments and how debt has still grown significantly. The presentation argues that the conventional wisdom of fixed-rate 30-year loans may not be the best strategy, as they are high cost and most borrowers refinance within 5 years. It introduces the Home Ownership Accelerator program as a line of credit that allows depositing income directly into the loan to pay it off faster by reducing interest costs. Key benefits are outlined as being flexible, maximizing
The document discusses home financing options and introduces the Home Ownership Accelerator product. Key points:
- The HOA is a line of credit attached to a homeowner's primary residence, allowing them to pay down their mortgage faster by making daily payments from deposited income.
- It aims to reduce interest costs over the long run and allow the home to be paid off in half the time compared to a traditional mortgage, with no changes to spending.
- Borrowers have access to the credit line via debit cards and checks, and payments are made automatically via direct deposit each day to reduce the loan balance and interest costs.
This document summarizes the changes in the US mortgage market that led to the 2008 financial crisis. It describes how mortgage products became riskier with low or no down payment loans and adjustable rates. Lenders approved risky loans to increase profits with little oversight. When interest rates rose and home prices fell, many borrowers defaulted, leading to a rise in foreclosures that hurt the broader economy. Government programs to help struggling homeowners had limited success and the crisis exposed flaws in how the mortgage market was regulated.
The document discusses the process of purchasing a home through a mortgage lender called Fairway. It begins by outlining the benefits of owning a home over renting, as owning allows individuals to build equity over time instead of their monthly payments disappearing as rent. It then walks through the steps involved in the home buying process, including getting pre-qualified, processing the loan, underwriting, pre-closing, and closing. Key aspects of mortgages like principal, interest, taxes, insurance, points, and amortization are also defined.
This document discusses 15 ways for real estate investors to obtain business credit, loans, and lines of credit. It begins by providing background on real estate investing and how house flipping has increased in popularity. It then explains why traditional lenders may not provide funding for high-risk real estate deals and outlines alternative options for financing flipping projects including unsecured credit, cash flow lending, merchant cash advances, securities-based lines of credit, 401(k) financing, and house flipper financing. It stresses the importance of building business credit over time by starting with vendor and store credit cards and lines of credit. Government grants are also mentioned as a source of free funding for real estate projects.
Everything you wanted to know about reverse mortgages (but were afraid to ask)Joe Heale
The document provides information about reverse mortgages offered by HomEquity Bank. It discusses what a reverse mortgage is, debunking common myths, eligible uses of funds, product options including CHIP and Income Advantage, and how qualification amounts are determined. Key details include that no mortgage payments are required, homeowners retain ownership of their home, funds are tax-free, and homeowners can expect to have equity remaining when the loan is repaid.
This document discusses various factors to consider when taking out a home loan or refinancing an existing loan. It notes that while most people want to pay off their home loan quickly, there are times when extra funds are needed for other purposes like renovations or investments. The document examines the costs and benefits of loans that charge ongoing fees versus those without fees. It also outlines other fees to be aware of like establishment fees, termination fees, and penalties for breaking fixed rates. Finally, it recommends obtaining a flexible loan with features like redraw facilities, offset accounts, and multiple repayment options to meet changing needs over time.
The document provides information on how to get bank approval for investment property financing by focusing on debt servicing. It discusses factors that affect debt servicing calculations like income, expenses, existing property ownership, down payments, and amortization periods. It emphasizes building a team of experts and understanding lender guidelines to structure financing that works with a borrower's long term investment goals. Contact information is provided for Geoff Lee who can help navigate investment property financing.
The document discusses home financing options and introduces the Home Ownership Accelerator product. Key points:
- The HOA is a line of credit attached to a homeowner's primary residence, allowing them to pay down their mortgage faster by making daily payments from deposited income.
- It aims to reduce interest costs over the long run and allow the home to be paid off in half the time compared to a traditional mortgage, with no changes to spending.
- Borrowers have access to the credit line via debit cards and checks, and payments are made automatically via direct deposit each day to reduce the loan balance and interest costs.
This document summarizes the changes in the US mortgage market that led to the 2008 financial crisis. It describes how mortgage products became riskier with low or no down payment loans and adjustable rates. Lenders approved risky loans to increase profits with little oversight. When interest rates rose and home prices fell, many borrowers defaulted, leading to a rise in foreclosures that hurt the broader economy. Government programs to help struggling homeowners had limited success and the crisis exposed flaws in how the mortgage market was regulated.
The document discusses the process of purchasing a home through a mortgage lender called Fairway. It begins by outlining the benefits of owning a home over renting, as owning allows individuals to build equity over time instead of their monthly payments disappearing as rent. It then walks through the steps involved in the home buying process, including getting pre-qualified, processing the loan, underwriting, pre-closing, and closing. Key aspects of mortgages like principal, interest, taxes, insurance, points, and amortization are also defined.
This document discusses 15 ways for real estate investors to obtain business credit, loans, and lines of credit. It begins by providing background on real estate investing and how house flipping has increased in popularity. It then explains why traditional lenders may not provide funding for high-risk real estate deals and outlines alternative options for financing flipping projects including unsecured credit, cash flow lending, merchant cash advances, securities-based lines of credit, 401(k) financing, and house flipper financing. It stresses the importance of building business credit over time by starting with vendor and store credit cards and lines of credit. Government grants are also mentioned as a source of free funding for real estate projects.
Everything you wanted to know about reverse mortgages (but were afraid to ask)Joe Heale
The document provides information about reverse mortgages offered by HomEquity Bank. It discusses what a reverse mortgage is, debunking common myths, eligible uses of funds, product options including CHIP and Income Advantage, and how qualification amounts are determined. Key details include that no mortgage payments are required, homeowners retain ownership of their home, funds are tax-free, and homeowners can expect to have equity remaining when the loan is repaid.
This document discusses various factors to consider when taking out a home loan or refinancing an existing loan. It notes that while most people want to pay off their home loan quickly, there are times when extra funds are needed for other purposes like renovations or investments. The document examines the costs and benefits of loans that charge ongoing fees versus those without fees. It also outlines other fees to be aware of like establishment fees, termination fees, and penalties for breaking fixed rates. Finally, it recommends obtaining a flexible loan with features like redraw facilities, offset accounts, and multiple repayment options to meet changing needs over time.
The document provides information on how to get bank approval for investment property financing by focusing on debt servicing. It discusses factors that affect debt servicing calculations like income, expenses, existing property ownership, down payments, and amortization periods. It emphasizes building a team of experts and understanding lender guidelines to structure financing that works with a borrower's long term investment goals. Contact information is provided for Geoff Lee who can help navigate investment property financing.
The document discusses recent mortgage updates in the UAE in 2021. It outlines several new initiatives introduced by the Central Bank of the UAE to help those facing financial difficulties during the COVID-19 pandemic, including postponing mortgage payments for up to 6 months, reducing interest rates to a fixed rate of 2.07%, eliminating or reducing processing fees, and increasing loan-to-value ratios by 5% for property purchases. These measures are aimed at providing temporary relief and making property purchases more affordable.
Private lending offers secured, hassle-free investments with superior yields. Investors can earn 12-15% interest by lending money to purchase and renovate residential properties, secured by mortgages. The company buys discounted homes, renovates them, then sells for a profit, paying back investors their principal plus accrued interest. This provides a stable, hands-free alternative to stocks with double-digit returns and protection of principal through property equity.
Cash Flow Gold offers a rent-to-own solution for clients who have been declined financing. Brokers can refer declined clients to the program and earn fees without much paperwork. The rent-to-own program allows clients to rent a home with an option to purchase it after 2 years, with 20% of rent payments credited towards the down payment. To qualify, clients must have sufficient income to cover rent and have a minimum 5% security deposit. Brokers should submit client files including application, credit report, income documentation, and notice of assessment for review.
Personal Finance for Engineers (Coursera 2018)Adam Nash
This document provides a summary of key concepts in personal finance. It begins with caveats that personal finance is poorly covered in education but has a massive impact. It then outlines five fast finance basics: 1) understanding behavioral finance biases, 2) valuing liquidity, 3) the importance of cash flow, 4) the power of compounding returns, and 5) that good investing is boring through low-cost index funds. The document provides examples and explanations for each of these high-level concepts in personal finance.
Investor's Capital Funding (ICF) provides alternative real estate financing in Texas, focusing on short-term loans secured by commercial and residential property. The company was founded by Managing Partners Rob Champion and Tom Wagner, who have over 30 years of combined real estate lending experience. ICF offers investors opportunities to earn returns of 10-12% by participating in non-traditional real estate loans that are secured by hard assets and have protective equity.
Peak Properties is a real estate investment firm that offers private lending opportunities for investors to earn high returns of 10-15% by lending money to the firm. The firm buys distressed homes, renovates them, and quickly resells them for profits. Investors are secured by first mortgages on the properties and their money is used to fund purchases and repairs. The loans are short term, usually 4-6 months, and investors receive their principal and interest back when the homes are sold. The presentation provides examples of past deals and touts the safety and passive nature of these investment opportunities.
Dealing with Covid19 : Managing Spending efficiencyAchmad Zaky
1. The Covid-19 pandemic may last longer than initially expected, with a vaccine still 12-18 months away and production/distribution taking additional months. There is no guarantee things will return to normal even after cases slow down.
2. Startups can be built during difficult times, as was the case with Bukalapak which started with no capital, investors, industry hype or talent.
3. Spending efficiency is critical during the Covid-19 era. Improving efficiency means focusing on variable costs like marketing and sales to acquire the most profitable customers, and reducing fixed costs such as staff, buildings and technology infrastructure.
The document discusses the benefits of a reverse mortgage for seniors aged 62 and older. A reverse mortgage allows homeowners to convert equity in their home into tax-free cash without having to make monthly payments. Borrowers can use the funds for supplemental income, paying off debts, home repairs, or leaving an inheritance. The loan does not become due until the borrower dies or moves out permanently, and the FHA insures that no debt passes to heirs.
This document summarizes a private lending program that provides secured, hassle-free investments with superior yields. It offers higher returns than other options like bank CDs through lending money to purchase and renovate real estate. The program aims to provide steady 12-15% returns through first and second mortgages while ensuring protection of principal through conservative loan-to-value ratios.
Debt Traps: Payday Loans, Car Title Loans, Tax Refund Anticipation LoanFairfax County
This document discusses predatory lending practices and provides consumer protection information. It summarizes types of predatory loans like payday loans, car title loans, and refund anticipation loans. It describes common predatory loan terms and tactics to trap borrowers, as well as consumers' rights. The document advises seeking alternatives to high-cost loans and provides contact information for consumer assistance agencies.
Call 912-303-5065 to learn how to earn passive double digit rates of return by investing in short term deeds of trust (mortgages) secured by undervalued real estate assets with a trusted partner with a strong track record of success
This document provides information about financial planning and investments. It discusses the importance of having liquid reserves, different types of investments including fixed and variable options, and factors to consider like risk, return, and taxes. It also covers retirement planning, comparing qualified versus non-qualified options, and how to structure investments for a tax-favored alternative retirement plan using universal life insurance. The key ideas are financial security, diversification, and maximizing returns while minimizing taxes and risks.
This document discusses different types of loans including:
- Pure discount loans where the borrower receives money upfront and repays a single sum later with no interest payments.
- Interest-only loans where the borrower pays only interest each period and repays the full principal later.
- Amortized loans where payments are made each period to pay off both principal and interest over the life of the loan.
- Partially amortized loans which are similar to amortized loans but have a balloon payment required at the end to pay off the remaining balance.
Examples of calculating payments and balances are provided for each type.
1) A reverse mortgage allows homeowners aged 62 and older to access equity in their home through a loan while continuing to live in their home. They do not have to make monthly mortgage payments but interest still accrues.
2) There are two main types of reverse mortgages offered by MetLife Bank - a HECM Standard, which provides the maximum amount available but higher upfront costs, and a HECM Saver with lower upfront costs but a smaller maximum loan amount.
3) The loan does not need to be repaid until the last surviving homeowner permanently moves out or passes away, as long as all terms are met. Counseling is required to ensure borrowers understand the implications of a
This document discusses a private mortgage lending program that offers investors 15% annual returns by lending money to a real estate company to purchase and renovate distressed properties. The company guarantees the 15% returns, secures the investment with documents like promissory notes and mortgages, and aims to purchase properties at below market value through renovations to create affordable housing and returns for investors. The document provides details on how the program works, sample returns comparisons, protections for investors, and background on the company running the program.
The document discusses investment opportunities in today's real estate market through a company called Buying and Selling Opportunities (BSO). BSO uses investor funds to purchase foreclosed and discounted properties, renovate them, then profit from lease options or resale. Investors can expect annual returns of 10-15% depending on the investment amount and time frame. An example deal is provided where a short sale property is purchased for $78K using a $25K investor loan, then leased for $130K over 2 years providing the investor a $7,500 return.
Personal Finance for Engineers (Lambda School, 2018)Adam Nash
This document provides a summary of a presentation on personal finance basics for engineers. It covers several key topics:
1. Behavioral finance and how people are not truly rational with money due to biases like anchoring, mental accounting, herd behavior, and loss aversion.
2. The importance of liquidity and having emergency funds for unexpected expenses.
3. Ensuring spending is less than income by creating an annual budget and tracking cash flow.
4. The power of compounding returns over long periods of time, especially when starting to save and invest early in one's career.
5. That good investing is "boring" and focusing on low-cost index funds within an appropriate asset
Everything you need to know before you buy your first home. Includes steps of the process, descriptions of financing options, lender red flags and credit score information.
A guide to helping you understand your credit score.
Table of Contents:
Understanding your credit score 1
How much does a low score cost you 2
How are credit scores calculated 3
Cracking the code 7
Improving your credit score 9
This document provides tips and advice about financing property investments. It discusses various topics like first home owner assistance programs, construction loans, credit scoring, loan structures, lenders mortgage insurance, buying at auction, offset accounts, and making extra payments. Throughout, it highlights potential pitfalls ("traps") to watch out for, such as ensuring pre-approvals cover both the borrower's ability and the specific property being purchased. The overall message is to be aware of financing options and their implications to make informed financial decisions around property investments.
The document promotes Mortgage Managers LLC, which claims it can help homeowners slash their mortgage payments by as much as 80% using a legal method. It says the company's consultants can teach clients how to manage their mortgage to build equity faster and pay off their home sooner. It also argues that traditional mortgages result in homeowners paying over 100% of the original loan amount in interest due to compounding rates over many years.
The document discusses recent mortgage updates in the UAE in 2021. It outlines several new initiatives introduced by the Central Bank of the UAE to help those facing financial difficulties during the COVID-19 pandemic, including postponing mortgage payments for up to 6 months, reducing interest rates to a fixed rate of 2.07%, eliminating or reducing processing fees, and increasing loan-to-value ratios by 5% for property purchases. These measures are aimed at providing temporary relief and making property purchases more affordable.
Private lending offers secured, hassle-free investments with superior yields. Investors can earn 12-15% interest by lending money to purchase and renovate residential properties, secured by mortgages. The company buys discounted homes, renovates them, then sells for a profit, paying back investors their principal plus accrued interest. This provides a stable, hands-free alternative to stocks with double-digit returns and protection of principal through property equity.
Cash Flow Gold offers a rent-to-own solution for clients who have been declined financing. Brokers can refer declined clients to the program and earn fees without much paperwork. The rent-to-own program allows clients to rent a home with an option to purchase it after 2 years, with 20% of rent payments credited towards the down payment. To qualify, clients must have sufficient income to cover rent and have a minimum 5% security deposit. Brokers should submit client files including application, credit report, income documentation, and notice of assessment for review.
Personal Finance for Engineers (Coursera 2018)Adam Nash
This document provides a summary of key concepts in personal finance. It begins with caveats that personal finance is poorly covered in education but has a massive impact. It then outlines five fast finance basics: 1) understanding behavioral finance biases, 2) valuing liquidity, 3) the importance of cash flow, 4) the power of compounding returns, and 5) that good investing is boring through low-cost index funds. The document provides examples and explanations for each of these high-level concepts in personal finance.
Investor's Capital Funding (ICF) provides alternative real estate financing in Texas, focusing on short-term loans secured by commercial and residential property. The company was founded by Managing Partners Rob Champion and Tom Wagner, who have over 30 years of combined real estate lending experience. ICF offers investors opportunities to earn returns of 10-12% by participating in non-traditional real estate loans that are secured by hard assets and have protective equity.
Peak Properties is a real estate investment firm that offers private lending opportunities for investors to earn high returns of 10-15% by lending money to the firm. The firm buys distressed homes, renovates them, and quickly resells them for profits. Investors are secured by first mortgages on the properties and their money is used to fund purchases and repairs. The loans are short term, usually 4-6 months, and investors receive their principal and interest back when the homes are sold. The presentation provides examples of past deals and touts the safety and passive nature of these investment opportunities.
Dealing with Covid19 : Managing Spending efficiencyAchmad Zaky
1. The Covid-19 pandemic may last longer than initially expected, with a vaccine still 12-18 months away and production/distribution taking additional months. There is no guarantee things will return to normal even after cases slow down.
2. Startups can be built during difficult times, as was the case with Bukalapak which started with no capital, investors, industry hype or talent.
3. Spending efficiency is critical during the Covid-19 era. Improving efficiency means focusing on variable costs like marketing and sales to acquire the most profitable customers, and reducing fixed costs such as staff, buildings and technology infrastructure.
The document discusses the benefits of a reverse mortgage for seniors aged 62 and older. A reverse mortgage allows homeowners to convert equity in their home into tax-free cash without having to make monthly payments. Borrowers can use the funds for supplemental income, paying off debts, home repairs, or leaving an inheritance. The loan does not become due until the borrower dies or moves out permanently, and the FHA insures that no debt passes to heirs.
This document summarizes a private lending program that provides secured, hassle-free investments with superior yields. It offers higher returns than other options like bank CDs through lending money to purchase and renovate real estate. The program aims to provide steady 12-15% returns through first and second mortgages while ensuring protection of principal through conservative loan-to-value ratios.
Debt Traps: Payday Loans, Car Title Loans, Tax Refund Anticipation LoanFairfax County
This document discusses predatory lending practices and provides consumer protection information. It summarizes types of predatory loans like payday loans, car title loans, and refund anticipation loans. It describes common predatory loan terms and tactics to trap borrowers, as well as consumers' rights. The document advises seeking alternatives to high-cost loans and provides contact information for consumer assistance agencies.
Call 912-303-5065 to learn how to earn passive double digit rates of return by investing in short term deeds of trust (mortgages) secured by undervalued real estate assets with a trusted partner with a strong track record of success
This document provides information about financial planning and investments. It discusses the importance of having liquid reserves, different types of investments including fixed and variable options, and factors to consider like risk, return, and taxes. It also covers retirement planning, comparing qualified versus non-qualified options, and how to structure investments for a tax-favored alternative retirement plan using universal life insurance. The key ideas are financial security, diversification, and maximizing returns while minimizing taxes and risks.
This document discusses different types of loans including:
- Pure discount loans where the borrower receives money upfront and repays a single sum later with no interest payments.
- Interest-only loans where the borrower pays only interest each period and repays the full principal later.
- Amortized loans where payments are made each period to pay off both principal and interest over the life of the loan.
- Partially amortized loans which are similar to amortized loans but have a balloon payment required at the end to pay off the remaining balance.
Examples of calculating payments and balances are provided for each type.
1) A reverse mortgage allows homeowners aged 62 and older to access equity in their home through a loan while continuing to live in their home. They do not have to make monthly mortgage payments but interest still accrues.
2) There are two main types of reverse mortgages offered by MetLife Bank - a HECM Standard, which provides the maximum amount available but higher upfront costs, and a HECM Saver with lower upfront costs but a smaller maximum loan amount.
3) The loan does not need to be repaid until the last surviving homeowner permanently moves out or passes away, as long as all terms are met. Counseling is required to ensure borrowers understand the implications of a
This document discusses a private mortgage lending program that offers investors 15% annual returns by lending money to a real estate company to purchase and renovate distressed properties. The company guarantees the 15% returns, secures the investment with documents like promissory notes and mortgages, and aims to purchase properties at below market value through renovations to create affordable housing and returns for investors. The document provides details on how the program works, sample returns comparisons, protections for investors, and background on the company running the program.
The document discusses investment opportunities in today's real estate market through a company called Buying and Selling Opportunities (BSO). BSO uses investor funds to purchase foreclosed and discounted properties, renovate them, then profit from lease options or resale. Investors can expect annual returns of 10-15% depending on the investment amount and time frame. An example deal is provided where a short sale property is purchased for $78K using a $25K investor loan, then leased for $130K over 2 years providing the investor a $7,500 return.
Personal Finance for Engineers (Lambda School, 2018)Adam Nash
This document provides a summary of a presentation on personal finance basics for engineers. It covers several key topics:
1. Behavioral finance and how people are not truly rational with money due to biases like anchoring, mental accounting, herd behavior, and loss aversion.
2. The importance of liquidity and having emergency funds for unexpected expenses.
3. Ensuring spending is less than income by creating an annual budget and tracking cash flow.
4. The power of compounding returns over long periods of time, especially when starting to save and invest early in one's career.
5. That good investing is "boring" and focusing on low-cost index funds within an appropriate asset
Everything you need to know before you buy your first home. Includes steps of the process, descriptions of financing options, lender red flags and credit score information.
A guide to helping you understand your credit score.
Table of Contents:
Understanding your credit score 1
How much does a low score cost you 2
How are credit scores calculated 3
Cracking the code 7
Improving your credit score 9
This document provides tips and advice about financing property investments. It discusses various topics like first home owner assistance programs, construction loans, credit scoring, loan structures, lenders mortgage insurance, buying at auction, offset accounts, and making extra payments. Throughout, it highlights potential pitfalls ("traps") to watch out for, such as ensuring pre-approvals cover both the borrower's ability and the specific property being purchased. The overall message is to be aware of financing options and their implications to make informed financial decisions around property investments.
The document promotes Mortgage Managers LLC, which claims it can help homeowners slash their mortgage payments by as much as 80% using a legal method. It says the company's consultants can teach clients how to manage their mortgage to build equity faster and pay off their home sooner. It also argues that traditional mortgages result in homeowners paying over 100% of the original loan amount in interest due to compounding rates over many years.
BUYING YOUR FIRST HOME - capitalhomelending.cacapitalhl
1) The document provides guidance on shopping for a mortgage by outlining three key steps: understanding your mortgage needs and options, getting pre-approved, and making the right decision.
2) The first step involves determining how much you can afford for a down payment, mortgage payments, fees and deciding on a mortgage term, amortization period, and whether to choose a fixed or variable interest rate.
3) The second step is to get pre-approved in order to understand what you qualify for before house hunting, and the third step is to consider all costs when deciding on the right mortgage.
How to Turn Unqualified Homebuyers into Qualified OnesTroy Ross
You can help unqualified buyers buy a home. Past credit issues are no longer a blockade for buyers! Take a look at our presentation to learn how they too can get qualified to buy a home in as little as 4 to 6 months. This presentation is presented by the Richmond REIA.
Tax-Advantaged Real Estate Investing When You've Maxed Out Your Self-Directed...Tom Rutkowski
This document discusses using permanent life insurance as a tax-advantaged way to invest and access funds for real estate investing. It outlines how life insurance provides stable, high returns that can be borrowed against at low rates, allowing investments to earn returns in two places at once. This "micro-banking" strategy improves returns without additional risk compared to traditional real estate investing. The document uses an example of a real estate investor to demonstrate how this strategy provides higher returns, asset protection, a death benefit, and income in case of critical illness.
This document discusses revenue-based financing or cash flow financing as an alternative source of business financing for companies that may not qualify for traditional bank loans. Revenue-based financing uses a company's current and future revenue as collateral rather than physical assets. Investors provide capital in exchange for a percentage of the company's ongoing gross revenues until the initial capital plus a multiple is repaid. The document outlines the requirements, terms, approval process and potential uses of revenue-based financing. Key aspects include analyzing bank statements for consistent deposits and cash flow, repayment terms of 6-18 months where payments are deducted daily from revenues, and approval times of 24-48 hours.
This document provides guidance on handling tax questions related to CMG's Home Ownership Accelerator loan product. It explains that the interest is treated similarly to a traditional mortgage for tax purposes. Specifically, it notes that the acquisition portion is fully deductible up to $1 million and home equity portions are deductible up to $100,000 if used for non-home improvements. The document recommends explaining this to clients and involving their tax advisors if they have questions.
This document outlines strategies for paying off a mortgage faster using principles of debt shrinkage. It discusses focusing income towards the mortgage by using salary credit direct to the home loan account. Using an offset account is recommended to reduce interest charges. Spending on credit cards within interest free periods and paying them off in full each month is suggested to utilize free bank money. Extra repayments above the minimum are shown to dramatically reduce total interest costs over the life of a loan through examples. Getting help from a debt shrink specialist is offered.
This document provides information and strategies for dealing with debt. It begins by having participants calculate their total debt and monthly payments. It then discusses debt ratios and signs of being in debt trouble. The main part of the document outlines 10 strategies for reducing debt, such as increasing income, decreasing expenses, contacting creditors, credit counseling, debt consolidation loans, various types of bankruptcy, and dealing with the IRS. It warns about credit card fees and scams, and provides tips for choosing a credit card. In the end, it discusses how to review one's credit report and beware of fraudulent credit repair companies.
This document provides information and strategies for dealing with debt. It begins by having participants calculate their total debt and monthly payments. It then discusses debt ratios and signs of being in debt trouble. The main part of the document outlines 10 strategies for reducing debt, such as increasing income, decreasing expenses, contacting creditors, credit counseling, debt consolidation loans, various types of bankruptcy, and dealing with the IRS. It warns about credit card fees, minimum payment traps, and credit repair scams. Overall, the document aims to help people understand their debt situation and provides a variety of options for getting out of debt.
The document discusses and compares several options for dealing with debt, including bankruptcy, government debt consolidation, credit counseling, and a non-profit debt relief program called NuStart. It provides details on fees, interest rates, program length and impact to credit for each option. It then focuses on NuStart, outlining its guidelines including minimum debt amounts, payment terms, acceptable and non-acceptable account types. Examples of debt settlements NuStart has achieved for clients are presented. Commission structures for referrals to NuStart are also covered.
This document provides an overview of a loan modification information session presented by David Wilhite. The session agenda includes an overview of the Home Affordable Modification Program (HAMP), how California Foreclosure Assistance (CAFA) differs from other loan modification companies, and an exercise for homeowners. Key points made are that HAMP has had a lower success rate than projected, CAFA provides scenario-based analysis to determine eligibility for HAMP and other programs, and homeowners should be cautious of paying third parties for assistance that may be available for free.
On January 24, members of Freestar Financial attended a Mortgage Mixer Event. The Vice President of Lending, Jennifer Martines and Realtor, Peter Toering presented the importance of having a good credit score and the documentation you will need in order to start a mortgage application.
Understanding Your Credit with SpringCoinCarrie Smith
A complete presentation from SpringCoin on Understanding and Improving Your Credit Score. How to establish or re-establish credit properly to save money and pay down debt.
This document provides information about Onroad Shop, a financial advisor that helps connect customers with banks and loans. It discusses the types of loans Onroad Shop deals with, including home loans, vehicle loans, business loans, and personal loans. It also outlines the loan application process and documents required for different loan types. Key rules for taking a loan are presented, such as keeping the EMI affordable, maintaining a short loan tenure to reduce interest costs, taking insurance for large loans, and considering switching lenders for better interest rates. Overall loan procedures and Onroad Shop's banking partners are summarized.
There are different sources for financing representing various opportunities. This seminar will tell you about some of these opportunities and the best method for increasing your chance of securing a loan. The program will also bring clarity to what financing opportunities the Federal Government offers through the Small Business Administration. Co-Sponsored with the High Point and Greensboro Public Libraries. Facilitated by Chisa D. Pennix-Brown, MBA of Lady Bizness, Inc.
The document discusses various strategies for dealing with debt, including increasing income, decreasing expenses, contacting creditors, credit counseling, debt consolidation, bankruptcy, and credit card fees and traps. It provides tips on using the PowerPay method to accelerate debt repayment by reallocating payments as debts are paid off. It warns that credit card minimum payments can result in high interest costs over time and paying more than the minimum each month reduces costs.
This document provides an overview of personal credit and credit scores. It defines credit as borrowing money that must be repaid over time, with interest. The benefits of credit include purchasing power and establishing a credit history, while risks include debt, fees, and damage to one's credit if not repaid. The "four C's" that lenders evaluate are credit history, collateral, capacity to repay, and current conditions. It also discusses credit reports, credit scores, responsible credit management, and why maintaining good credit is important.
2. Elemental Economics - Mineral demand.pdfNeal Brewster
After this second you should be able to: Explain the main determinants of demand for any mineral product, and their relative importance; recognise and explain how demand for any product is likely to change with economic activity; recognise and explain the roles of technology and relative prices in influencing demand; be able to explain the differences between the rates of growth of demand for different products.
OJP data from firms like Vicinity Jobs have emerged as a complement to traditional sources of labour demand data, such as the Job Vacancy and Wages Survey (JVWS). Ibrahim Abuallail, PhD Candidate, University of Ottawa, presented research relating to bias in OJPs and a proposed approach to effectively adjust OJP data to complement existing official data (such as from the JVWS) and improve the measurement of labour demand.
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Seminar: Gender Board Diversity through Ownership NetworksGRAPE
Seminar on gender diversity spillovers through ownership networks at FAME|GRAPE. Presenting novel research. Studies in economics and management using econometrics methods.
Economic Risk Factor Update: June 2024 [SlideShare]Commonwealth
May’s reports showed signs of continued economic growth, said Sam Millette, director, fixed income, in his latest Economic Risk Factor Update.
For more market updates, subscribe to The Independent Market Observer at https://blog.commonwealth.com/independent-market-observer.
How Does CRISIL Evaluate Lenders in India for Credit RatingsShaheen Kumar
CRISIL evaluates lenders in India by analyzing financial performance, loan portfolio quality, risk management practices, capital adequacy, market position, and adherence to regulatory requirements. This comprehensive assessment ensures a thorough evaluation of creditworthiness and financial strength. Each criterion is meticulously examined to provide credible and reliable ratings.
5 Tips for Creating Standard Financial ReportsEasyReports
Well-crafted financial reports serve as vital tools for decision-making and transparency within an organization. By following the undermentioned tips, you can create standardized financial reports that effectively communicate your company's financial health and performance to stakeholders.
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Understanding how timely GST payments influence a lender's decision to approve loans, this topic explores the correlation between GST compliance and creditworthiness. It highlights how consistent GST payments can enhance a business's financial credibility, potentially leading to higher chances of loan approval.
Abhay Bhutada, the Managing Director of Poonawalla Fincorp Limited, is an accomplished leader with over 15 years of experience in commercial and retail lending. A Qualified Chartered Accountant, he has been pivotal in leveraging technology to enhance financial services. Starting his career at Bank of India, he later founded TAB Capital Limited and co-founded Poonawalla Finance Private Limited, emphasizing digital lending. Under his leadership, Poonawalla Fincorp achieved a 'AAA' credit rating, integrating acquisitions and emphasizing corporate governance. Actively involved in industry forums and CSR initiatives, Abhay has been recognized with awards like "Young Entrepreneur of India 2017" and "40 under 40 Most Influential Leader for 2020-21." Personally, he values mindfulness, enjoys gardening, yoga, and sees every day as an opportunity for growth and improvement.
1. Home Ownership AcceleratorHome Ownership Accelerator
CMG Home Ownership AcceleratorCMG Home Ownership Accelerator®®
Realtor® Focused PresentationRealtor® Focused Presentation
3-25-10
Copyright 2005-2010, CMG Mortgage, Inc. All rights reserved. Home Ownership Accelerator , the yellow flying house logo, and other marks are registered trademarks of CMG Financial
Services, Inc. Content and concepts presented here are proprietary information which is made available for the sole purpose of training and educating CMG-approved agents and their
clients, and is non-transferrable, non-distributable, and may not be copied or repurposed. Any other use outside CMG=approved educational efforts is unauthorized, except with the express
written permission of CMG Mortgage Inc.
2. Home Ownership AcceleratorHome Ownership Accelerator
2
Our Parents Spent Their Working Years Trying
to Pay Off Their 30-Year Mortgage.
Right idea. Wrong tool.
Opening thoughts…..Opening thoughts…..
3. Home Ownership AcceleratorHome Ownership Accelerator
3
Product Trend: Smaller PaymentsProduct Trend: Smaller Payments
LESS
PRINCIPAL
MORE
PRINCIPAL
BIGGER
PAYMENT
SMALLER
PAYMENT
15-Yr Loan
20-Yr Loan
30-Yr Loan
Bi-weekly Loan
40-Yr Loan
50-Yr Loan
Int. Only Loan
Neg Am
Option ARM
3/1, 5/1, 7/1, 10/1 Hybrid ARMs
4. Home Ownership AcceleratorHome Ownership Accelerator
4
Easy payments, low rates, and...Easy payments, low rates, and...
Price vs
Household
Income
(Q1 :1987 = 1.0)
5. Home Ownership Accelerator
5
Debt still out of control.Debt still out of control.
Mortgage debt more than doubled since 2000
Source: Federal Reserve, U.S. Census data
http://www.federalreserve.gov/econresdata/releases/mortoutstand/current.htm
http://www.federalreserve.gov/Releases/housedebt/
6. Home Ownership AcceleratorHome Ownership Accelerator
Conventional Wisdom…Conventional Wisdom…
“A 30-year fixed is a great loan!”
“Lock-in a low fixed-rate today!”
“Your payment never changes!”
“Record low rates!”
6
7. Home Ownership AcceleratorHome Ownership Accelerator
Wisdom? High Cost of Fixed-Rate Loan StrategyWisdom? High Cost of Fixed-Rate Loan Strategy
• Price tag (Truth in Lending): we try not to look!
– A $500K loan at 5.5% interest: = $522K in interest!
• Built-in hedge costs:
– 0.50%+/- ($30,000 on typical $300K loan)
• Freddie Mac average “age” of loan: <5 years.
– Eight loans in 40 year window: $50K in refi costs
• At the 5-year mark (16% of 30-year term)….
– Virtually all borrowers have refinanced
– 25% of total interest due has been paid
• 5-year cumulative interest: +81% premium over a 5-year amortization.
– Payment is still 75% interest
• Takes 17.5 years to achieve parity on interest/principal payment.
– Only 5% of borrowers will have made extra payments
7
8. Home Ownership AcceleratorHome Ownership Accelerator
8
Today’s Mortgage is #1 Barrier to Building WealthToday’s Mortgage is #1 Barrier to Building Wealth
• Mortgage consumes about half of your net income.
– Typical mortgage payment vs income (DTI ratio):
• 33-45% of gross income
• Often exceeds 50% of net income.
• Most of payment is interest (or all of it!)
• Mortgage always takes priority
• Most of us will retire WITH a mortgage
• Persistent burden:
– Prevents us from buying up
– Prevents us from purchasing more real estate
9. Home Ownership AcceleratorHome Ownership Accelerator
9
Reducing Interest: The Mortgage TriangleReducing Interest: The Mortgage Triangle
• People try all 3 ways to reduce interest.
– But which one is the most effective?
INTEREST COST
TERM
PRINCIPAL
Make extra payments – works, but has 3 issues
% RATE
Unpopular:
15-year loans
Marginal
impact:
Rate chasing
10. Home Ownership AcceleratorHome Ownership Accelerator
10
Accelerating via extra paymentsAccelerating via extra payments
• Problems:
– Commitment:
• Extra payments crimp lifestyle!
• Hard to stick with it… for 22 years.
– Irreversible: extra payments are “one-way”
• Might need that money in an emergency
• Over-aggressive pre-payment of a fixed-rate loan could result in
insufficient liquidity.
– Impact: only can use a tiny portion of your resources
• Usually not more than 1/3 of your residual cash
• Federal Reserve:
– Only 5% make regular extra payments
– Average: $125 (less than 1/3 of cash available)
11. Home Ownership AcceleratorHome Ownership Accelerator
11
How it looks: piles and holesHow it looks: piles and holes
Bank account: 1%
Home loan: 6%
Income
Expenses
•Prepaying isn’t attractive
•Might need that money
•Can’t get it back
12. Home Ownership AcceleratorHome Ownership Accelerator
12
What if we could change this?What if we could change this?
Bank account: 1%
Home loan: 6%
Income
Expenses
13. Home Ownership AcceleratorHome Ownership Accelerator
13
Just move the arrows…Just move the arrows…
Bank account: 1%
Home loan: 6%
Income
Expenses
14. Home Ownership AcceleratorHome Ownership Accelerator
14
Simple change, big impact.Simple change, big impact.
You could…
• Save thousands in interest
and
• Pay off in about half the time
with
• No change to spending habits
TM
15. Home Ownership AcceleratorHome Ownership Accelerator
15
How it worksHow it works
• You deposit your paycheck into the loan
• Therefore, your daily balance is less.
• Therefore, you save interest.
• Therefore, you have more money for principal.
• Therefore, you pay off faster.
• Notice how we didn’t change your spending?
– For expenses, it works just like a normal checking account!
16. Home Ownership AcceleratorHome Ownership Accelerator
16
How does it work?: 5-minute movieHow does it work?: 5-minute movie
On the homeownershipaccelerator.net site below.
17. Home Ownership AcceleratorHome Ownership Accelerator
17
Highlights from the 5-min movieHighlights from the 5-min movie
HomeOwnershipAccelerator.net
18. Home Ownership AcceleratorHome Ownership Accelerator
Solves the 3 Big Problems with AccelerationSolves the 3 Big Problems with Acceleration
• Easy to stick with.
– Direct deposits into the account
– “Set it and forget it”
• Flexible.
– Default is always to aggressively attack debt FIRST
• Only loan where you pay principal FIRST
– However, if you have extra expenses, you have access
• Maximize impact
– ALL your income can go towards paydown
• Idle cash works for YOU, not the Bank
18
20. Home Ownership AcceleratorHome Ownership Accelerator
20
Structure: Line of creditStructure: Line of credit
Initial credit line (10 years)
Credit line (final 20 years),
decreases by 1/240 per month
Principal
balance
(sample)
Available credit
$500K LINE
$400K LOAN
10 20 30
21. Home Ownership Accelerator
21
YOU are in Control of the BalanceYOU are in Control of the Balance
Money In (reduces)
– Direct Deposit (ideal method)
– Bonuses, dividends
– Rental property income
– Small business income*
• Money Out (increases)
– Interest
• Computed on daily balance
• Added to principal on due date
– Access to money (equity)
• ATM/Debit Card
– ATM (Cirrus/MasterCard®
)
$1,000/day limit
– ATM charges rebated 6/mo
– MC P.O.S. debit card
$2,500/day limit
• Unlimited checks
• Bill-pay (free)
*See your CPA and
tax advisor.
22. Home Ownership AcceleratorHome Ownership Accelerator
22
Details….Details….
• Line of credit: first lien position
– Owner-occupied, primary residences, purchase/refinance
– Line amounts: $100K to $2.5million
– Initial draw: 25%-97% of the line
– Requires 25% down (75% LTV maximum)
– 700 FICO – all borrowers
– Up to 45% debt-to-income ratio
– Rate:
• 1 mo. LIBOR index (=0.23% today)
+ margin: 2.75% / 3.00% / 3.25%
• Initial rate: 2.98% / 3.23% / 3.48%
– Margin improvements up to -0.50% for high FICO and low LTV
• Qualify at Initial Rate +2%, interest-only!
• Life Cap: +6% over Initial rate (= 8.48-9.48%)
• Minimum rate (floor): 3.5% (everyone is at this today).
– $60 annual fee, waived in year 1.
23. Home Ownership AcceleratorHome Ownership Accelerator
23
Who is the Ideal customer?Who is the Ideal customer?
• Money-savvy
• Positive cash flow
• Solid credit
• Good money-management habits
• Long term view / goal oriented
24. Home Ownership AcceleratorHome Ownership Accelerator
24
But it’s an Adjustable…But it’s an Adjustable…
• It’s not about the rate!
• It’s about the principal balance!
25. Home Ownership AcceleratorHome Ownership Accelerator
““Which Sign Would You Rather HaveWhich Sign Would You Rather Have
in Your Front Yard?”in Your Front Yard?”
25
I have 6% APR
and paid
$400,000
in interest
I have 6% APR
and paid
$400,000
in interest
I have 8% APR
and paid
$250,000
in interest
I have 8% APR
and paid
$250,000
in interest
26. Home Ownership AcceleratorHome Ownership Accelerator
““The Only Loan Where you Pay Principal FirstThe Only Loan Where you Pay Principal First
™™””
• All other loans take interest first.
• Whatever is left = principal
• With the HOA, your paycheck drives balance down.
• “Even the money for your loan payment helps you save
interest, while it waits for your monthly statement to
arrive.”
26
39. Home Ownership AcceleratorHome Ownership Accelerator
Other typical concernsOther typical concerns
• Property value decline: reduction of line / freezing
• Tax deductibility
39
40. Home Ownership AcceleratorHome Ownership Accelerator
40
Can my line be reduced / Suspended?Can my line be reduced / Suspended?
• Yes, under certain conditions set forth in Reg. Z.
– Specific circumstances, not arbitrary
• See the line of credit agreement for full details.
• Biggest concern: Substantial property value decline
• Big difference
– 75% LTV and paying down, vs 100% LTV /tapping equity
• “Never put all of your eggs in one basket”
– Home Ownership Accelerator is no different
– Maintain financial flexibility to handle any situation
– Keep an eye on property value and interest rates!
– Consult financial advisor for guidance
41. Home Ownership AcceleratorHome Ownership Accelerator
41
But I’ll lose my interest tax deduction…But I’ll lose my interest tax deduction…
• Good news…you WILL!
• Interest is not in your best interest!
– Pay $3 in interest to get a $1 deduction?
– Want larger tax deductions? Get a higher rate!
• Interest is still deductible
while you have the loan
42. Home Ownership AcceleratorHome Ownership Accelerator
Tax deductibility rulesTax deductibility rules
• Acquisition debt
– $1 million (married, filing jointly)
– Acquisition or improvement
– HOA financing/refinancing your home
• Home equity debt
– $100,000
– Non-acquisition, non-improvement
– HOA re-draws (living expenses)
– Repaid with subsequent inbound deposits
42
43. Home Ownership AcceleratorHome Ownership Accelerator
43
Tax deductibility: same rules applyTax deductibility: same rules apply
$400K
$200K
Example: redraw $150K from equity
(only $100K is deductible as
home equity debt*, unless used
for improvements)
$350K
New acquisition debt level
(fully deductible)
Orig. acquisition debt basis
Same tax
deductibility:
- First + HELOC
- Cashout refi
(Flags in 2010)
- HOA
HOA
difference:
-Single loan!
Non deductible
$300K
*Except under Alternative Minimum Tax rules
44. Home Ownership AcceleratorHome Ownership Accelerator
More Purchasing PowerMore Purchasing Power
44
Typical Jumbo Loan
Home Ownership
Accelerator®
Max Loan Amount $2.0M $2.5M
Max. DTI Ratio 40% 45%
Qualifying Interest Rate
Fully Indexed Rate
(about 5.75%)
Fully-amortized
Rate +2%
(about 5% today)
Interest-only
Payment on $1 Mil loan
$5,836
(APR 5.869%)
$2,917
(APR 3.50%)
50% less!
Purchasing power of $150K
income
$1.07M
at 80% LTV
($857K loan)
$1.80M
at 75% LTV
($1.35M loan)
68% more house
57% more loan
Other --
24/7 Access to equity
Faster equity buildup
Direct deposit
Automatic payment
45. Home Ownership AcceleratorHome Ownership Accelerator
Healthy/Happy Borrower:Healthy/Happy Borrower:
Better for YOUBetter for YOU
• Healthy borrower: more business downstream
– Faster equity buildup:
• Post-purchase improvements
• Flexibility to take advantage of real estate opportunities
• Equity for future purchases
• Happy borrower: more referrals
– 6:1 referral ratio
– Only 10% payoff rate in portfolio since 2005!
– Borrowers talk! “Backyard barbeque loan!”
45
46. Home Ownership AcceleratorHome Ownership Accelerator
46
Bottom line:Bottom line:
The loan your Clients should know about!The loan your Clients should know about!
• Most powerful home financing tool available!
– Superior purchasing power
– 3.5% fully-indexed rate
– Interest only qualification: higher ratios
– Faster paydown / equity buildup
– 24/7 access to equity for expenses, AND opportunities
SPECIAL WEBINAR OFFER:
FREE APPRAISAL!!
(GOOD THRU APRIL 30, 2010)
Tell the loan agent who invited
you to provide your client’s name
to me.
SPECIAL WEBINAR OFFER:
FREE APPRAISAL!!
(GOOD THRU APRIL 30, 2010)
Tell the loan agent who invited
you to provide your client’s name
to me.
49. Home Ownership AcceleratorHome Ownership Accelerator
““Know Thy LIBOR”Know Thy LIBOR”
• Avg rate of increase, last 3 rising rate periods: 1.45%/yr
• Average duration of last 3 rising rate periods: 26 mos.
• Average LIBOR (historical): 4.3%.
• Average LIBOR +2.75% (i.e., HOA) = 7.1%
– Plus HOA cash flow effect - - typical effective rate 3-5%
• Freddie Mac average 30Y FX (historical) = 7.1%
49
50. Home Ownership AcceleratorHome Ownership Accelerator
Know your (LIBOR) History!Know your (LIBOR) History!
50
Max: 9% Avg: 4.3%
Cur: 0.23%
LIBOR+2.75% Avg: 7.09%
Fixed Avg: 7.04%
51. Home Ownership AcceleratorHome Ownership Accelerator
51
Where is my Money, Really?Where is my Money, Really?
And is it FDIC-Insured?And is it FDIC-Insured?
• Money is swept against your loan balance daily.
– Any intra-day balance is FDIC insured,
– But no end-of-day “pile” to insure.
• Your cash is converted to home equity
– Saves interest
– Higher effective yield
on your money
• No “pile” anymore - - filling the hole instead.
– 24/7 access to your money
Those artificially low payments and low interest rates boosted demand for homes, and prices skyrocketed. &gt;In fact, we saw the price-to-income relationship which had been fairly steady for decades increase to unsustainable levels. People were buying homes they really couldn’t afford. Where once it was buy what you can afford, the new mantra became “buy regardless of whether you can afford it, as long as the payment works.”
So, it’s no wonder that mortgage debt has skyrocketed. &gt; U.S. Mortgage debt has nearly doubled since 2000, to over $10 trillion dollars! And we know that income and population haven’t grown at that rate since then! Now home prices are falling substantially. A large number of homeowners actually owe more than their home is worth, and millions of others are stuck with huge mortgages that came with over-inflated home prices. &gt;As a result, today’s families are saddled with nearly 3 times as much debt as a percent of disposable income as their parents and grandparents were.
And servicing all that debt is a huge effort. &gt;For most consumers, about half of their net income goes to pay the mortgage (assuming typical debt ratios). &gt;And since most of these mortgages are relatively new, they mostly consist of interest, versus principal. And the mortgage always takes priority, doesn’t it. Over emergencies, investments, opportunities, etc. &gt; Keep in mind that mortgage interest is a COST. Yes, deductibility tends to make it less painful, but it’s a cost. Money that you could be investing or saving for other purposes. It’s an enemy of true wealth-building.
So if you want to minimize the cost of your mortgage, &gt;what can you do? Well, it’s helpful to visualize your mortgage as a &gt;triangle. There are three levers that you can use in reducing the cost of your loan. &gt; The first is the term. Usually that’s established up front, and shorter terms, while they can save interest, are &gt;unpopular since the payment on these loans – like 15-year loans – is significantly larger and comes at you every month. &gt; The next lever is Rate. This one’s more familiar to those of us who like to refinance to chase rate. &gt;The problem is that it’s largely ineffective – refinancing comes with its own cost, and has only marginal impact on your lifetime interest costs. You don’t hear of many people who have refinanced their way into freedom from debt - - and there are millions of people who refinance frequently and will still have a mortgage in retirement. &gt;The third lever is to change the loan amount. While this amount is set up front, you can always manually reduce the loan amount with extra payments along the way. Let’s talk about this some more on the next slide.
The reason they hold back is that the extra money might come in handy, and extra mortgage payments are one-way - - that money is locked in when it might be needed in an emergency. In fact, it would not be unreasonable to say that over-aggressive pre-payment of a fixed-rate loan could leave you with insufficient liquidity!
We’ve boiled this down into a diagram we call “piles and holes”. &gt;Your money sits in a pile (on the left), earning very little, and all of the activity is at the pile. &gt;Your paychecks come in, and your spending goes out. It earns 1 percent or less, usually. Over on the right is the hole - - or more properly a “whole” lot of debt. It costs 6%. And once a month you put a little money in the hole - - remember its just the principal portion of your monthly house payment. If you have any extra money, you could prepay some additional principal and get done with your loan faster. &gt;But most people don’t do this, because they might need that money down the road, and once you prepay any principal, it’s permanent - - you can’t get it back.
But what if we could change this? What if you could fill up the hole with any unused money you had, whether or not you were going to need it in the future. If you could do this, the hole would then get smaller, and cost less interest. And when you needed the money, let’s say you could simply reach down in the hole and get some out!
And with this new loan, that’s just what we’re going to do. We simply move the arrows from here, &gt;to here. So all we’re changing is where your paychecks go first, and where your spending comes out of.
It’s a simple change. But it has a big impact. You could save thousands in interest, pays off in about half the time, and do it all with no change to your spending habits.
One great way to pitch the product quickly is to use the “ski slope” approach. We all know that when you start skiing down the hill, you start at the top, right? Well, with the Home Ownership Accelerator, the top of the hill is “depositing funds”. That’s what makes the loan work! You start with “deposit” and then keep saying the word therefore each time you explain the effect that follows. &gt; So, you “deposit” your paycheck into the loan…&gt; therefore, your daily balance is less…&gt; therefore, you save interest….&gt; therefore, you have more money for principal…..&gt;therefore you pay off faster. &gt;And notice how we didn’t change your spending? Remember, if you start with putting the paycheck in the loan, and just keep saying therefore, and explain what that does, you’ll never get lost!
But first, let’s take a look at how it works….. &gt;This 5-minute movie is also on the web at www.homeownership.net, and you can play it anytime.
Here are some highlights from the movie - -
Your old loan - - it amortizes SLOWLY.
The HOA - - note the paycheck coming in (balance dropping) and your expenses going out (balance going back up) - - note the difference between the daily balance on the HOA and the old loan. There’s your interest savings!
The process repeats, month after month.
The balance is often so much less, that interest rate changes have a much smaller effect on the loan.
And the solution we found starts right where the money flow starts - - the checking account. First, when you get paid, where do you put your money? Of course. You put it in a checking account, so you can get access to it when you need it. There are lots of good reasons we store up money in a checking account: &gt; short term needs like a sandwich at lunch and gas money, and &gt; monthly bills. But we often forget that we have to also stash money away for longer term needs – things like &gt; property taxes and vacations – you don’t invest that money in the stock market, because it might not be there when you need it. So we leave it in low-interest accounts, waiting patiently to be spent. &gt; And we also have money we just leave in there for emergencies, or to prevent bouncing a check - - money that always stays in there. But again, while all of this money you make is waiting to get spent, we all know it doesn’t earn much interest.
This is how the loan is structured. &gt; Let’s say you needed $400,000, and took out a &gt;line of credit for $500,000. &gt;The line of credit would remain at $500,000 for 10 years, &gt; then it would decrease by 1/240 per month for the remaining 240 months or 20 years. This represents the maximum amount you can borrow. Your $400,000 loan being paid down &gt; is the blue line. As you pay down, you can see that the &gt; available credit changes. Unlike a normal HELOC where you can only draw for 10 years and then you have a 15 year repay, with the Accelerator, you can draw on the line for a full 30 years. And because it’s a line of credit, you aren’t required to make deposits every month, like a mortgage, as long as you stay below your credit limit. This makes it an excellent loan for self-employed individuals whose income might fluctuate. It also can leave a nice cushion if you have unexpected expenses or other emergency.
&gt;When money comes in, it reduces the loan’s principal balance. These are things like the &gt;direct deposit of income, which is essentially the payment, plus a whole lot extra. &gt;Any bonuses and dividends too. &gt;You can also deposit rents and &gt;small business cash in the account temporarily, which will also reduce principal balance and save interest. &gt;Consult with your CPA and your tax advisor when doing this, as certain regulations do apply.
&gt;When money goes out, it increases the loan balance. The main ones are interest and expenses. &gt; Interest is computed on daily balance, and posted to your statement, which cycles on the last business day of the month. &gt;If you deposit no new funds and you have available credit, 25 days later, any payment due is automatically paid from your account, increasing your loan balance. Or, if you send in a deposit, any payment due will be deducted first and the residual amount reduces your principal balance. This means that in most cases, a cash-flow positive borrower, whose payment and living expenses are less than their income, should not usually have to write a check to make a payment, and would never be late! Remember, when payments are due, most cash-flow-positive borrowers will already have made a deposit of a paycheck, which keeps the balance lower until the payment is required. &gt;And, you have full access to equity, available equity, just like your old bank account. &gt; You get an ATM/Debit card that’s good at over a million ATM’s worldwide where the MasterCard® and Cirrus logos are shown, and gets 6 surcharge-free transactions per month up to $1,000 per day. &gt; The ATM card can be used as a MasterCard point-of-sale debit card anywhere MasterCard is accepted; it has a $2,500 per day limit. &gt;You can write as many checks as you like, up to your credit limit. &gt;And, there’s free online bill-pay as well.
&gt;Again, the CMG Home Ownership Accelerator is not a mortgage! It’s a line of credit.
&gt;We’ll do loans up to $2.5 million, &gt;with an initial draw between 25% and 97% of the line amount.
&gt;The LTV can be up to 75% of appraised value,
&gt;and all borrowers need FICO’s of 700 FICO or higher,
&gt;and a debt ratio of 45% or lower.
&gt;The line of credit is based on the 1-month LIBOR index, plus you can select margins from 2.50% up to 3.00% over LIBOR..
&gt;And the life cap is just 6% over the starting rate.
&gt;There is a minimum, or floor rate, of 3.5%.
&gt;The annual fee of $60 is waived in year one.
Who is best suited for the Home Ownership Accelerator?
&gt;The best client is generally a money-savvy borrower with good positive cash flow. This allows them to force down the balance enough during the month to be able to generate some interest savings versus a traditional loan.
&gt;Usually this means that they have a reasonable sized mortgage, compared to their income and expenses. Another way to put this is that they have a reasonable debt-to-income ratio.
&gt;The ideal client also has great credit, and has good money-management habits.
If you meet all of these criteria, you may be a good fit for the HOA. But, since each of us has different finances, the only way to really tell, is to put your information into the interactive simulator and let it compute the savings and payoff timing. And even then, it’s critical to make sure that you understand exactly how the loan works, and to discuss how it fits into your overall financial plan.
Another common question is what happens if rates go up? &gt;Remember, it’s no longer about the rate, it’s about how much interest you pay, on a lower principal balance. Because you’re continually forcing your principal balance down compared to where it would have been with a traditional loan, you’re going to pay less interest. So even if rates go up considerably, you could still end up paying less interest and paying off sooner.
This is where we have really rewritten the old rule of rate driving your payment. Imagine choosing from two signs to put in your front yard. &gt; One says I paid 6% and $400,000 in interest. &gt; The other says I paid 8% and $250,000 in interest. Which sign would you choose? Of course, you’d choose the one that makes you look smart!
&gt; And, remember, if you have funds in low-interest savings accounts that are earning less than your mortgage rate, you can park these funds against the mortgage, driving down your principal balance, and it often completely offsets the effect of rising interest rates. The best part is that you still have full access to these funds if ever you need them.
Many of us have heard that lines of credit in recent downturn have been either frozen, where new draws against the line cannot be made, or reduced, where the line of credit limit is reduced. &gt; All lines of credit are like this, and the HOA is no exception. &gt; The line of credit agreement contains full details. In short, however, this can occur &gt; if the property value declines significantly, &gt;the lender reasonably believes you won’t be able to continue to pay the loan,&gt; you are in default, &gt;there is some governmental action or notification that prevents the lender from collecting payments on the loan, &gt;or the APR on the loan surpasses the interest rate cap and as a result you’d be drawing funds at below-market rates.
&gt;Therefore, the old “Don’t put all your eggs in one basket” rule also applies to your Home Ownership Accelerator account. Experts recommend that you never put all of your assets in any one investment, &gt; and the Accelerator is no exception. &gt; You should have ample financial flexibility to handle any situation by having appropriate diversification and adequate reserves. Once that’s established, accelerating loan payoff can be accomplished with confidence. &gt;We recommend that clients seek guidance from their financial advisor.
A third concern that people have is losing their tax deduction when their loan pays off. &gt; The good news is that you WILL lose it when your loan pays off. &gt;We like to say that “interest is not in your best interest” because you have to pay $3 in interest to get about $1 back in deductions - - not a great deal. In fact, if getting a higher tax deduction was the objective, then you’d want to take out a loan with a higher interest rate, right? Of course this makes no sense. So get rid of your loan as soon as you can, with the CMG Home Ownership Accelerator. &gt; And remember, the same tax rules apply to this loan as with other loans, and the interest you do pay while you have the loan, may be tax deductible – your clients should see their tax advisor.
This graph visually shows that if you originally had a $400K loan, and you paid it down to $200K, your new acquisition debt basis would be reestablished at $200K. Now you need to pull out $300K, let’s say. You have 3 ways to do it. Get a HELOC (or second), do a cashout refi to a new loan, or get a HOA. The same tax rules apply to all 3 moves - - you can only go up by $100K (which is a home equity draw in all cases, unless you use the money for improvements) and still have it be deductible. Your new tax deductibility would be $300K in all cases!
We hope this presentation has given you a solid understanding of why we believe this loan is truly &gt;the most powerful financial tool in the home finance world today. Savvy borrowers can finally benefit from the power of their money working for them, not the bank. All in all, the Home Ownership Accelerator is a loan whose time &gt;has finally come.
&gt;And just in time for homeowners, who need their money to work harder than ever.
For them.
&gt;Whose money is it after all?
Thanks for learning more about the revolutionary CMG Home Ownership Accelerator.
To wrap up, we’re going to review 10 common questions that people have about the loan.
We often get asked if the account if FDIC insured. &gt; Once your funds go into the Accelerator, they sweep from the HOA’s checking account interface promptly against the loan balance. So while any daily balance is FDIC insured, there’s generally nothing to insure.
&gt; You’re converting your lazy money to hard working home equity, which saves you interest, and so the effective yield on this money is now equal to your mortgage interest rate. &gt; Remember, there’s no “pile” anymore - - you’re filling the hole up while your money isn’t busy. And just like a bank, you have 24/7 access to your money for any expenses.
Thanks for learning more about the revolutionary CMG Home Ownership Accelerator.