The document discusses the importance of asking the right questions when taking out loans, specifically focusing on the total cost and payoff time rather than just the interest rate or monthly payment. It provides an example showing how paying extra toward the principal can save tens of thousands in interest costs over the lifetime of a 30-year mortgage. The document also compares conventional mortgages that use pre-computed 30-day interest against daily simple interest loans, showing how the latter option reduces costs and builds equity faster in the early years of the loan.

1. HOW WOULD LIFE BE IF YOU WERE DEBT FREE?

2. Why does it seem like everyone in America is in Debt? Because when we borrow money, we ask the wrong questions. We ask: 1. What is the rate ? 2. What is the payment ? R Questions: We should ask: 1. What is the TOTAL COST ? (Principal and interest paid, total out of pocket $) 2. When will I have the loan PAID OFF ? The Right Questions:

3. RATE OR TIME What’s more important?

4. What does 7% of a $100,000 mean? $__________________ Does Time or Interest Rate have a bigger effect on a mortgage? Example: So anything you can do to save TIME over the term of your mortgage will save you the most $$$. Wouldn’t you agree?

5. Rate or Time & Compound Interest ? 10 YEARS OF SAVING $775.28 mo. @ 12% = $182,686 INTEREST SAVINGS = $54,000 TOTAL SAVINGS = $236,686

6. The 5 Components of a Loan 1. The Loan Amount. 2. The Rate. 3. The Payment. 4. The Total Interest. 5. The Term.

7. The Power of the Daily Simple interest Loan vs. Pre-computed 30 Day interest Loan (Conventional Mortgage) $100,000 Mortgage 10% 30 Year Term Monthly payment = $878 month Biweekly (Half Payment) $439 every 14 Days

8. Pre-Computed 30 Day interest Loan (Conventional Mortgage) Monthly payment of $878.00 $100,000 x 10 % = $10,000 $878.00 Monthly payment /12 Months = 1st Month’s - $833.33 Monthly Int. Interest of $833.33 $44.67 Principal $99,955.33 x 10 % = $9,995.53 $878.00 Monthly payment /12 Months = 2nd Month’s - $832.96 Monthly Int. Interest of $832.96 $45.04 Principal Total Principal in 60 Days = $89.71

9. Daily Simple Interest Loan Bi-Weekly Payment of $439.00 Month #1 $100,000 x 10% = $10,000 $439.00 Bi-Weekly /360 Days = $27.777 -$388.88 14 Days Int. x 14 Days = $388.88 $50.12 Principal $99,949.88 x 10 % = $9,994.98 $439.00 Biweekly /360 Days = $27.763 - $388.69 14 Days Int. x 14 Days = $388.69 $50.31 Principal Month #2 $99,899.57 x 10 % = $9,989.95 $439 Bi-Weekly /360 Days = $27.749 - $388.49 14 Days Int. x 14 Days = $388.49 $50.51 Principal $99.849.06 x 10 % = $9,984.90 $439.00 Bi-Weekly /360 Days = $27.735 - $388.30 14 Days Int. x 14 Days = $388.30 $50.70 Principal Total Principal in 60 Days = $201.61

10. CONVENTIONAL BI-WEEKLY = Withdrawn from your account = Payment applied to loan

11. Daily Simple Interest Loan vs. Pre-Computed 30 Day Interest Loan Daily Un-paid Balance Total Equity Build-Up First 60 Days $201.61 If the first Bi-weekly payment is made at the closing of the loan: $439.00 Principal reduction $0 to Interest Pre-Computed 30 Day Interest Cycle Total Equity Build-Up First 60 days $89.71 Most don’t allow first payment at closing.

12. First Day Payment Strategy Loan Amount: $100,000 Interest Rate: 10.00 % Term: 30 years Payment: $878 1 Payment of $878 Payments Saved 18 Total of Payments Saved $15,804

13. Benefits of a $.M.A.R.T. Loan with CitiCorp Trust Bank 1. Potential tax savings on previously non deductible interest. 2. Eliminates revolving debt. 3. No PMI. (Private Mortgage Insurance) 4. Advantage of daily unpaid balance loan versus conventional mortgage with 30 day pre-computed interest. 5. 95% Loan to Value 6. No Out of Pocket Costs 7. No Escrow account, you benefit from the interest not the bank 8. Simple underwriting - 48 hour approval 9. No up front appraisal / application fee - only pay if loan closes 10. Working with PFS provides a plan in writing (FNA) to: A) Get out of Debt. B) Stay out of Debt. C) Become Financially Free!