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![MORT – GAGE
Pledge Until Death!
mort·gage (mōŕgij) n. [[ OFr – mort, dead
+ gage, pledge]]
1 to pledge (property) by a mortgage
2 to put an advance claim on / to
mortgage one’s future/](https://image.slidesharecdn.com/seminar-120926155940-phpapp01/85/TOTAL-REPAY-6-320.jpg)
Uploaded byColin Outhred
TOTAL REPAY
This document discusses options for paying off a mortgage more quickly. It shows that on average, clients can pay off a 30-year mortgage in 8-14 years by making additional principal payments without increasing their monthly payments. It also compares the total interest paid over 12, 25, and 30 years for a $200,000 mortgage. Finally, it provides an example of using a line of credit as a checking account to funnel extra income towards the principal each month.
TOTAL REPAY
- 2. DO YOU OWNYOUR HOME – OR DOES YOUR LENDER?
- 3. FOR MOST OFUS, THE MORTGAGE IS THE LARGEST DEBT WE WILL EVER HAVE!
- 4. On average our clients learn to: Pay off their 30 year loans in 8-14 years! Without making Higher Monthly
- 5. No Mortgage Payment? What could you do?
- 6. MORT – GAGE Pledge Until Death! mort·gage (mōŕgij) n. [[ OFr – mort, dead + gage, pledge]] 1 to pledge (property) by a mortgage 2 to put an advance claim on / to mortgage one’s future/
- 7. The Cost ofa $200,000 Mortgage @ 6% (Is It or Isn’t It 6% ?) Year Total Paid Principal Interest Balance 1 14,389 2,456 11,933 197,543 2 28,778 5,036 23,714 194,936 10 143,892 32,628 111,263 167,371 20 287,784 91,992 195,791 108,007 30 431,677 200,000 231,677 0
- 8. Compare the Options Total Principal Principal $200,00 & Interest & 0 Repay Fortnightly Intere st Monthly YEARS TO BE DEBT 12 YEARS 25 YEARS 30 YEARS FREE $97,637 $184,367 $231,677 INTEREST PAID
- 9. YOU HAVE CHOICES!! REGULARCHEQUE ACCOUNT We Pay Deposit Income For Mortgages • Cheques Household • Service Fees Cheque Acct Living Expenses • Money orders Earns • Travelers cheques • Bounced cheques Credit Cards, etc. 0% Interest Miscellaneous INTEREST ONLY 2 ND MORTGAGE Deposit Income/ Benefits Make Payment Mortgages • Simple Interest Income • Interest Only Lowers Living Expenses •Pre-Approved Limit Balance – Credit Cards, etc. • Purchasing Power Saves $$ (interest) Miscellaneous
- 10.
- 11. What’s In AHome? Value $400,000 1st Mortgage $200,000 Payment/Month $1,200 Principal/Month $200
- 12. Fixed 1 Mortgage st 1st Year Balance $200,000 Yearly Principal $2,500 $197,500 Sub Total
- 13. Example: Consumer Debt Debts That Could Be Consolidated Loans (car, etc.) Amt. $20,000 Pymt. $750 Cards, etc. Amt. $30,000 Pymt. $500 $50,000 Pay Off Total $1,250 -$250 Line of Credit $50,000 $1,000 6% Payment $250 Interest Only 2nd Mortgage Bal. $50,000
- 14. Income & Expenses Income $5,000 Expenses $4,000 Left Over $1,000
- 15. LINE OF CREDITAS THE CHEQUE ACCOUNT Start Balance $50,000 Payment / Income -5,000 Balance 45,000 E +4,000 Balance Month One 49,000 Surplus 1st mo. $1,000 Payment / Income -5,000 Balance 44,000 Surplus 2 mo. nd $1,000 Expenses +4,000 12 Month $12,000 Balance Month Two 48,000 2nd Balance $38,000
- 16. Reducing the 1stMortgage 1st Year Bal. $200,000 Yearly Prin. $2,500 Sub Total $197,500 From 2nd Mort $12,000 From the LOC Total Year 1 $185,500 Yearly Prin. Sub Total From 2nd Mort Total Year 2
- 17. Amortization Schedule Amortization ScheduleFor: John and Jane Property Address: 1324 Owe D’ Bank Way Loan Programme: Loan Amount $200,000 Interest Rate 6% Term 360 Months
- 18. Interest - -- - - - - - - - - - - - - - Monthly Payment- - - - - - - - - - - - - - - - - Remaining No Rate Payment Principal Interest Balance 1 6.0 1,199.10 199.10 1,000.00 199,800.90 2 6.0 1,199.10 200.10 999.00 199,600.80 3 6.0 1,199.10 201.10 998.00 199,399.70 4 6.0 1.199.10 202.10 997.00 199,197.60 5 6.0 1,199.10 203.11 995.99 198,994.49 6 6.0 1,199.10 204.13 994.97 198,790.36 7 6.0 1,199.10 205.15 993.95 198,585.21 8 6.0 1,199.10 206.17 992.93 198,379.04 9 6.0 1,199.10 207.20 991.90 198,171.84 10 6.0 1,199.10 208.24 990.86 197,963.60 11 6.0 1,199.10 209.28 989.82 197,754.32 12 6.0 1,199.10 210.33 988.77 197,543.99 14,389.20 2,456.01 11,933.19 13 6.0 1,199.10 211.38 987.72 197,332.61 14 6.0 1,199.10 212.44 986.66 197,120.17 15 6.0 1,199.10 213.50 985.60 196,906.67 16 6.0 1,199.10 214.57 984.53 196,692.10 17 6.0 1,199.10 215.64 983.46 196,476.46 18 6.0 1,199.10 216.72 982.38 196,259.74 19 6.0 1,199.10 217.80 981.30 196,041.94 20 6.0 1,199.10 218.89 980.21 195,823.05 21 6.0 1,199.10 219.98 979.12 195,603.07 22 6.0 1,199.10 221.08 978.02 195,381.99 23 6.0 1,199.10 222.19 976.91 195,159.80 24 6.0 1,199.10 223.30 975.80 194,936.50 14,389.20 2,607.49 11,781.71
- 19. Interest - -- - - - - - - - - - - - - - Monthly Payment- - - - - - - - - - - - - - - - - Remaining No Rate Payment Principal Interest Balance 25 6.0 1,199.10 224.42 974.68 194,712.08 26 6.0 1,199.10 225.54 973.56 194,486.54 27 6.0 1,199.10 226.67 972.43 194,259.87 28 6.0 1.199.10 227.80 971.30 194,032.07 29 6.0 1,199.10 228.94 970.16 193,803.13 30 6.0 1,199.10 230.08 969.02 193,573.05 31 6.0 1,199.10 231.23 967.87 193,341.82 32 6.0 1,199.10 232.39 966.71 193,109.43 33 6.0 1,199.10 233.55 965.55 192,875.88 34 6.0 1,199.10 234.72 964.38 192,641.16 35 6.0 1,199.10 235.89 963.21 192,405.27 36 6.0 1,199.10 237.07 962.03 192,168.20 14,389.20 2,768.30 11,620.90 37 6.0 1,199.10 238.26 960.84 191,929.94 38 6.0 1,199.10 239.45 959.65 191,690.49 39 6.0 1,199.10 240.65 958.45 191,449.84 40 6.0 1,199.10 241.85 957.25 191,207.99 41 6.0 1,199.10 243.06 956.04 190,964.93 42 6.0 1,199.10 244.28 954.82 190,720.65 43 6.0 1,199.10 245.50 953.60 190,475.15 44 6.0 1,199.10 246.72 952.38 190,228.43 45 6.0 1,199.10 247.96 951.14 189,980.47 46 6.0 1,199.10 249.20 949.90 189,731.27 47 6.0 1,199.10 250.44 948.66 189,480.83 48 6.0 1,199.10 251.70 947.40 189,229.13 14,389.20 2,939.07 11,450.13
- 20. Interest - -- - - - - - - - - - - - - - Monthly Payment- - - - - - - - - - - - - - - - - Remaining No Rate Payment Principal Interest Balance 49 6.0 1,199.10 252.95 946.15 188,976.18 50 6.0 1,199.10 254.22 944.88 188,721.96 51 6.0 1,199.10 255.49 943.61 188,466.47 52 6.0 1.199.10 256.77 942.33 188,209.70 53 6.0 1,199.10 258.05 941.05 187,951.65 54 6.0 1,199.10 259.34 939.76 187,692.31 55 6.0 1,199.10 260.64 938.46 187,431.67 56 6.0 1,199.10 261.94 937.16 187,169.73 57 6.0 1,199.10 263.25 935.85 186,906.48 58 6.0 1,199.10 264.57 934.53 186,641.91 59 6.0 1,199.10 265.89 933.21 186,376.02 60 6.0 1,199.10 267.22 931.88 186,108.80 14,389.20 3,120.33 11,268.87 61 6.0 1,199.10 268.56 930.54 185,840.24 62 6.0 1,199.10 269.90 929.20 185,570.34 63 6.0 1,199.10 271.25 927.85 185,299.09 64 6.0 1,199.10 272.60 926.50 185,026.49 65 6.0 1,199.10 273.97 925.13 184,752.52 66 6.0 1,199.10 275.34 923.76 184,477.18 67 6.0 1,199.10 276.71 922.39 184,200.47 68 6.0 1,199.10 278.10 921.00 183,922.37 69 6.0 1,199.10 279.49 919.61 183,642.88 70 6.0 1,199.10 280.89 918.21 183,361.99 71 6.0 1,199.10 282.29 916.81 183,079.70 72 6.0 1,199.10 283.70 915.40 182,796.00 14,389.20 3,312.80 11,076.40
- 21. REDUCING THE 1stMORTGAGE 1st Year Bal. $200,000 Yearly Prin. $2,500 Sub Total $197,500 From 2nd Mort $12,000 $ $12,000 From 2nd Mortgage Total Year 1 $185,500 Yearly Prin. $3,500 $47,979 INTEREST Sub Total $182,000 SAVING From 2nd Mort Total Year 2 $170,000
- 22. Interest - -- - - - - - - - - - - - - - Monthly Payment- - - - - - - - - - - - - - - - - Remaining No Rate Payment Principal Interest Balance 49 6.0 1,199.10 252.95 946.15 188,976.18 50 6.0 1,199.10 254.22 944.88 188,721.96 51 6.0 1,199.10 255.49 943.61 188,466.47 52 6.0 1.199.10 256.77 942.33 188,209.70 53 6.0 1,199.10 258.05 941.05 187,951.65 54 6.0 1,199.10 259.34 939.76 187,692.31 55 6.0 1,199.10 260.64 938.46 187,431.67 56 6.0 1,199.10 261.94 937.16 187,169.73 57 6.0 1,199.10 263.25 935.85 186,906.48 58 6.0 1,199.10 264.57 934.53 186,641.91 59 6.0 1,199.10 265.89 933.21 186,376.02 60 6.0 1,199.10 267.22 931.88 186,108.80 14,389.20 3,120.33 11,268.87 61 6.0 1,199.10 268.56 930.54 185,840.24 62 6.0 1,199.10 269.90 929.20 185,570.34 63 6.0 1,199.10 271.25 927.85 185,299.09 64 6.0 1,199.10 272.60 926.50 185,026.49 65 6.0 1,199.10 273.97 925.13 184,752.52 66 6.0 1,199.10 275.34 923.76 184,477.18 67 6.0 1,199.10 276.71 922.39 184,200.47 68 6.0 1,199.10 278.10 921.00 183,922.37 69 6.0 1,199.10 279.49 919.61 183,642.88 70 6.0 1,199.10 280.89 918.21 183,361.99 71 6.0 1,199.10 282.29 916.81 183,079.70 72 6.0 1,199.10 283.70 915.40 182,796.00 14,389.20 3,312.80 11,076.40
- 23. Interest - -- - - - - - - - - - - - - - Monthly Payment- - - - - - - - - - - - - - - - - Remaining No Rate Payment Principal Interest Balance 73 6.0 1,199.10 285.12 913.98 182,510.88 74 6.0 1,199.10 286.55 912.55 182,224.33 75 6.0 1,199.10 287.98 911.12 181,936.35 76 6.0 1.199.10 289.42 909.68 181,646.93 77 6.0 1,199.10 290.87 908.23 181,356.06 78 6.0 1,199.10 292.32 906.78 181,063.74 79 6.0 1,199.10 293.78 905.32 180,769.96 80 6.0 1,199.10 295.25 903.85 180,474.71 81 6.0 1,199.10 296.73 902.37 180,177.98 82 6.0 1,199.10 298.21 900.89 179,879.77 83 6.0 1,199.10 299.70 899.40 179,580.07 84 6.0 1,199.10 301.20 897.90 179,278.87 14,389.20 3,517.13 10,872.07 85 6.0 1,199.10 302.71 896.39 178,976.16 86 6.0 1,199.10 304.22 894.88 178,671.94 87 6.0 1,199.10 305.74 893.36 178,366.20 88 6.0 1,199.10 307.27 891.83 178,058.93 89 6.0 1,199.10 308.81 890.29 177,750.12 90 6.0 1,199.10 310.35 888.75 177,439.77 91 6.0 1,199.10 311.90 887.20 177,127.87 92 6.0 1,199.10 313.46 885.64 176,814.41 93 6.0 1,199.10 315.03 884.07 176,499.38 94 6.0 1,199.10 316.60 882.50 176,182.78 95 6.0 1,199.10 318.19 880.91 175,864.59 96 6.0 1,199.10 319.78 879.32 175,544.81 14,389.20 3,734.06 10,655.14
- 24. Interest - -- - - - - - - - - - - - - - Monthly Payment- - - - - - - - - - - - - - - - - Remaining No Rate Payment Principal Interest Balance 97 6.0 1,199.10 321.38 877.72 175,223.43 98 6.0 1,199.10 322.98 876.12 174,900.45 99 6.0 1,199.10 324.60 874.50 174,575.85 100 6.0 1.199.10 326.22 872.88 174,249.63 101 6.0 1,199.10 327.85 871.25 173,921.78 102 6.0 1,199.10 329.49 869.61 173,592.29 103 6.0 1,199.10 331.14 867.96 173,261.15 104 6.0 1,199.10 332.79 866.31 172,928.36 105 6.0 1,199.10 334.46 864.64 172,593.90 106 6.0 1,199.10 336.13 862.97 172,257.77 107 6.0 1,199.10 337.81 861.29 171,919.96 108 6.0 1,199.10 339.50 859.60 171,580.46 14,389.20 3,964.35 10,424.85 109 6.0 1,199.10 341.20 857.90 171,239.26 110 6.0 1,199.10 342.90 856.20 170,896.36 111 6.0 1,199.10 344.62 854.48 170,551.74 112 6.0 1,199.10 346.34 852.76 170,205.40 113 6.0 1,199.10 348.07 851.03 169,857.33 114 6.0 1,199.10 349.81 849.29 169,507.52 115 6.0 1,199.10 351.56 847.54 169,155.96 116 6.0 1,199.10 353.32 845.78 168,802.64 117 6.0 1,199.10 355.09 844.01 168,447.55 118 6.0 1,199.10 356.86 842.24 168,090.69 119 6.0 1,199.10 358.65 840.45 167,732.04 120 6.0 1,199.10 360.44 838.66 167,371.60 14,389.20 4,208.86 10,180.34
- 25. REDUCING THE 1stMORTGAGE 1st Year Bal. $200,000 Yearly Prin. $ Sub Total $197,500 From 2nd Mort $12,000 $12,000 From 2nd Mortgage Interest Savings Total Year 1 $185,500 $47,979 From Amortization Yearly Prin. $3,500 Sub Total $182,000 $32,825 Savings 2nd Year From 2nd Mort $12,000 Total Year 2 $170,000 $80,804
- 26. THE SOLUTION • We evaluate client’s total consumer debt • We calculate the exact split for your 1st Mortgage and Line of Credit to maximise savings. • Use your LOC like your current household cheque account to • Should your loans avoidrestructuring, we are your interest and simplify need finances. always there to assist.
- 28. “Many companies willgive you a mortgage …. We show you how to get out of one!”
Editor's Notes
- #2 My name is Colin from Total Repay, I would like to thank you for coming to today’s presentation. We specialise in helping average hard working families provide security for their future, by saving on mortgage interest payments. In the last ten years Total Repay has helped over 10,000 clients in this endeavour. And most importantly, last financial year our clients saved over $10.5 million in interest payments, and that figure will grow to over $15 million in savings in the next financial year. In previous years, that money went to the banks, but now they are using this money to build wealth for their families. In today’s/tonight’s seminar, we’ll show you how thousands of average people, just like you, have taken advantage of these benefits. The decision to become involved with the Total Repay system is an important one, and it usually requires several steps. The first of those steps is information only, so I’ve got some good news and some bad news. The bad news is that you won’t be able to pay me any money today. I can see that’s very disappointing to some of you. But the good news is in the next 40 odd minutes we’ll be talking about some exciting things. We’ll look at various types of home loans, we’ll discuss some of the questions people commonly ask when they look at their mortgage options, and we’ll discuss some exciting new opportunities in home loan financing that will allow some of you to pay off your existing home mortgage years quicker. But most importantly, I will give you some understanding of just how the Total Repay method works. The initial information is covered in two stages, this seminar and a free personal assessment. We’ll ask you, at the end of today’s seminar, whether or not you feel it’s worthwhile to get further information. When we finish, if you don’t feel that you’d like to save money, or won’t require extra wealth in retirement, then you won’t need to go any further. On the other hand, if you feel, based on what you learn today, that you would like further information on how to save money and build wealth, we’ll ask you to register for an in-home personal assessment. Does that sound fair? Before we start I’d like to make sure everyone’s in the right place. Is there anyone here who has any personal or religious beliefs that would make it uncomfortable for them to be wealthy?
- #3 Let’s start at the beginning. Who really owns the home? Most people think that because they have purchased as opposed to renting that they own the home. In actuality the bank owns it until the last payment has been made. They can force a mortgagee sale due to late payments. Stories you’ve heard about banks taking someone's home are not made up, they actually happen. We would like to think that the money lender has our best interest at heart but it is not always the case.
- #4 For most of us our mortgage is the largest debt that we ever have. In Australia, money lenders will allow between 35-50% of a homeowners income to be spent on the mortgage. After 30% taxes it does not leave the average person much left over to use on themselves. It is not surprising then that many people reach retirement without enough or anything for that matter in investments. College educations that were meant to be paid for are not. Dream trips in retirement are forgotten. There must be a better way!
- #5 With the Total Repay system, on average our clients learn to pay OFF their 30 year loans in 8 - 12 years! Without making higher monthly payments or increasing their frequency. You may be asking how this is possible and let’s in fact say that you can not pay any loan off early without adding extra principal. With our system our clients learn how to manage their money differently that gives them more control and their money works more for them instead of their lender as you will see shortly.
- #6 Before we go on if you had no mortgage payment what could you do? Go to that dream holiday destination? More time with kids or pay for university educations? Get that dream toy you have always wanted? The ideas are limitless without that huge mortgage payment every month!
- #7 Here is the irony about where the word mortgage comes from? It is an old French word that originated when peasants or country folk would actually take their children to the king and queen and they would pledge them to be a chamber maid or their son to work in the stables “For Life”!! In return they received land or paid less taxes. The term pledge until death came from pledging that child until death to the crown. Now the word is used for our mortgages, and after refinancing a 30 year mortgage every 5 years or less, it can really feel like a “life sentence” can’t it? So now lets take a look at that typical 30 year mortgage!
- #8 Her we see an example of 30 year mortgage at 6%. The question is, “is or isn’t it 6%?” Lets look at year 1, $14,000 total paid $2,500 to principal and $12,000 paid to interest. Pretty good deal for the bank about 84% of the monthly payment. Let me ask you “if I was the only loan broker around and I offered you a loan where you send me $14,000 and offer to put $2500 towards the principal and keep $12,000 for myself as a service fee”! What would your reaction be? “Get out of town!!” Of course! Look at year 10 the client still owes over ¾ of the principle balance and look what the bank has made. In 20 years they still owe over half. Look at the bottom the line the $231,000 in interest is 116% of the total amount borrowed and 216% of the total amount paid!!! Why do they cal it 6%. The easy answer of course is that the loan is amortized over 30 years making the payments affordable. Most people can not write the $200,000 cheque. But does the lender deserve so much?
- #9 Lets compare some options. 1 st the 30 year Principal & Interest loan, and we know what happens here. There are fortnightly payment methods, however, with this method you actually pay one extra payment per year. With the Total Repay system we show you how to manage the mortgage and pay the loan off with an average of 12 years saving a lot more time and interest as well in this example $134,000 as opposed to $85,000 using fortnightly payments. Which option would you prefer?
- #10 We’ve looked at the mortgage side of things now lets look at the traditional banking system. The local branch you walk into offers you choices, and one of them you probably don’t know about or have never been explain how it works! The 1 st option the bank gives you is a cheque account to store your money. Most people take this one as a convenience. While your money sits there you make little or nothing while they use your money. You were aware of that weren’t you? In addition to this convenience we get to “ PAY” for much more like chequess, money orders, online banking in some cases and more. The choice we all have is an interest only 2 nd mortgage that if properly explained is an alternative to the regular cheque account. Your income can be deposited into this account just like in a cheque account but the difference is that your money sits there and saves you interest (denying the bank the margin) until you need it and you simply write a cheque and send it as normal. In fact on these accounts they actually offer as many free cheques as you need. There are other great benefits to these loans as well. Simple Interest: The loans are simple interest which is to say that the interest is calculated on the amount borrow at any given time instead of over 30 years on the entire amount. Much cheaper money. Interest Only: One way we save our clients money is the interest only payments are much less than the average consumer debt payments. Pre-Approved Limit: You can’t borrow more with a phone call like on a credit card. The loan has to be re-written and approved to get more money – they are hard to get into trouble with. Purchasing Power: Buy direct from IKEA instead of using their finance company.
- #11 Okay to learn exactly what we are talking about lets meet our example couple. John & Jane Doe. They have just moved into their new how and knowing what we know now about the mortgage and the banking systems in place lets see if using the Total Repay system we can keep them smiling.
- #12 First lets look at what their mortgage looks like using the typical loan that we discussed a few slides back. The Value of their home is $400,000 Their current is $200,000 Their monthly payment at 6% is $1,200. Their principal out of that is $200 a month about 16% as we discussed earlier. What are the implications of this the first year?
- #13 After one year of paying the minimum payments starting at $200,000 they will have paid around $2,500 to principal and have a balance right at $197,500. On the next slide lets look at the rest of John and Jane’s financial example or situation.
- #14 For our example lets assume that “unlike us”, they are a typical Australian couple, so John and Jane have some consumer debt that they are taking care of monthly. Lets say that they have a car loan that is $20,000 – click- and they pay $750 a month. They also have a couple credit cards and student loans that owe $30,000 on and they pay $500 a month. How much are they paying a month total for these debts? And how much debt do they have here The next click will pull in the house picture and a blank showing an LOC which they could borrow $50,000 against their house (remind client of the equity that John and Jane have in the home. Now with that $50,000 they could pay off the consumer debt (Next with a click the 2 nd mortgage and a blank pop in) Help the client with the use of a calculator (preferably them running it) figure the payment on the $50,000 by taking $50,000 X 6% = $3,000 (yearly interest) and dividing the $3,000 by 12 and click in the $250 payment With the next click it will put the $250 under the $1150 and with the next it show a savings of $900 – a good thing for John and Jane right?!
- #15 There are one more set of number that we need before we can look at the way the interest only 2 nd mortgage is used like a cheque account. (click in numbers as you go) Lets say for example sake that John and Jane bring home after tax $5000 a month. By consolidating their consumer debt we just saved them $1,000 so for our example can we now say that their monthly expenses are now $4000 a month which should leave them $1000 left over each month if it is NOT spent elsewhere. They could use it but it is truly amazing using Total Repay what can be done with it if it is used properly. Lets go on!
- #16 As before clicking in numbers as you explain them. Okay Mr. & Mrs. Client here is how the interest only 2 nd works in John & Jane’s favor. Remember they borrowed $50,000 on the loan and paid off the consumer debt leaving a balance of $50,000. Now instead of taking their income to the bank and putting it in their cheque account, the apply it to the balance and lower it to $45,000. (this is a good time to emphasise the TR system and that we realise most people don’t get paid in a lump some but we help them use their money in a way that the balance of their income sits in the account for a good portion of the month because of strategies that we teach them). If the balance is $45,000 when they calculate the payment then the payment is $225, saving $25. Now the expenses go back in of $4000 and if they leave the $1000 in the loan unused then the $1000 continues to save them interest doesn’t it? Lets go one more month - $5000 in lowers balance to $44,000 (higher or lower payment? is the question here) Expenses back in the balance is now $48,000 another $1000 in surplus has appeared. If we do the math in this example out to 12 months then their surplus would be (let them answer $12,000) and the balance would be (let them answer $38,000) and then point out that the $12,000 in longer being charged interest and the $38,000 is. GO TO NEXT SLIDE
- #17 Click in as usual. Or reducing the 1 st mortgage or principal & interest loan. If they did that lets look at the effect. Let the number come in and explain each and then give them the calculator and go to the next slide which is the amortisation schedule.
- #18 Point out that this the same as J & J’s 1 st – the amount and the interest rate. Next Slide
- #19 Refresh their memory of the payment being $1200 and the principal being paid down is $200 a month and focus for a moment on the total principal paid about $2500 and the balance after 1 year of about $197,500 Now if J & J re-borrowed $12,000 at a cost of $720 a year and put it on the 1 st they would lower the balance to $185,500 and “pointing “ to the schedule and say “ that until we find $185,500 on this schedule these payments would disappear or would not have to be made. As you go through the pages until you find $185,500 have them add into the calculator the total yearly interest avoided like here in year 2 of $11,781 Next Slide
- #20 $185,500 is not in year 3 so add $11,620 to that and again it is not in year 4 so add $11,450 to that. Next Slide
- #21 It is not in year 5 so add $11,268 to it. Here it is ($185,500) all the way 2 months into year 6 so lets add $1,960 to that number. What is the total Mr client (you should have $47,979 – do the math yourself several times so you know how to do it if you need to). Great Mr client for J & J that seems quite substantial would you agree? Next Slide
- #22 Clicking in. Their actual savings is $47,979. Lets do another year shall we? Click in the next year numbers and then… Next Slide
- #23 Find $185,500 again and point out that for J & J their next payment would have more principal now wouldn’t it? (answer should be yes if not show them that it is now $271 a month to start because they’ve accelerated the loan.) Now after 1 year they are approx at $182000 Next Slide
- #24 And with the $12,000 they would again lower their balance substantially to about $170,000 (you can have them do the math again or just point out the interest savings on this slide and the next and then click 2 slide ahead and let the slide show do the math explaining as you click) Next Slide
- #25 Next Slide after showing where we end up at $170,000 and pointing out savings.
- #26 Click in numbers and explain as you go and let the animation work before you move on to the next slide by emphasizing the $80,000 in 2 years that could go to the bank or stay in J & J’s hands for later use with Billy and Betty maybe. Here are $80,000 reasons why the bank won’t explain this to us! Next Slide
- #28 So can you “picture” yourself without a mortgage Next Slide