From: "Jeff Strickland"
Newsgroups: alt.org.natl-assn-mortgage-brokers
Subject: Re: Equity Acceleration
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Date: Mon, 23 Apr 2007 22:35:29 GMT
"Ashley" wrote in message
news:FA7Xh.1290$Wa.205@trnddc08...
> Since this is a mortgage newsgroup, I felt that a post offering a way to
> pay off notes
> using current income, without refinancing, or making additional out of
> pocket payments
> to principal or forcing the borrower to change his lifestyle would be on
> topic. Have you
> noticed that most of the posts on this group are about everything but
> mortgages.
>
Your post is on topic, although it is a commercial post that seeks to drum
up business. Since I am asking questions about your product, yoiu should
answer them here so that others might benefit from the answers you give me.
I am a former mortgage lender, which explains why I know the HELOC 1st
product. I know lots of stuff about mortgage lending, and the first rule of
mortgage lending is that the bank wants the money not the property. The
second rule of lending is the only way to pay a note off is to reduce the
principle, pay more principle than is required and the note can be paid off
early.
> The Money Merge Account enables the homeowner to use the bank's money from
> an
> open ended 2nd position HELOC to cancel future closed end interest in the
> 1st mortgage.
>
> Our system's algorithms enable the homeowner to pay off both the 1st and
> HELOC 2nd
> in as little as 1/3 the time. That's why we have some customers on
> schedule to be FREE
> and CLEAR on a 30 year note in 8 years. It takes some people longer and
> some people
> can do it in less time.
>
The ONLY way to do that is to take money from your pocket and throw it at
the mortgage.
You said there was no refi involved in your plan, but then you went on to
say that the borrower uses the banks' money from a HELOC to make payments on
the 1st. If the borrower hasn't already got a HELOC, then he must refinance
in order to get one. The bank is not going to let anybody use its money for
free. Period.
To the extent that one can divert savings dollars from the savings account
and use them to pay down the mortgage account, then one can repay the
mortgage in short order and not change their standard of living. That much
is accurate.
My question to you is, since mortgage interest is tax deductable, then
wouldn't a person that has the ability to repay a 30 year mortgage in 8
years be better off to get rid of his other debt and keep his mortgage?
Indeed, if equity appreciation is climbing, then wouldn't a high dollar wage
earner actually be better off with an Interest Only note for 5 or 10 years
where he could take the tax advantage of the interest he pays? I'm not a tax
guy, but it occurs to me that in a world of limited deductions, there are
people that actually benefit from paying mortgage interest. They have to
live somewhere, they might as well take a deduction on their residence.
> Our customers don't have to know anything about financial mathematics.
> They just have to
> follow the system's suggestions and tell it the truth about what they do
> in the real world.
>
> We believe that it is better to help people get out of debt than to keep
> them there forever.
>
> The math works and so does the MMA. If you would like to see some truth
> about mortgages,
> please visit www.be-mortgage-free.info where you may learn more.
>
> 1st position HELOCS are ok but dangerous for many people. Why do you think
> one needs
> very good credit to get one? The MMA works on any mortgage and most people
> can qualify.
>
>
> "Jeff Strickland" wrote in message
> news:4OwWh.3539$Fs6.3158@trnddc03...
>>
>> "Ashley" wrote in message
>> news:XK6Wh.273$Fs6.44@trnddc03...
>>> First of all, I am not lying and we are not money lenders.
>>> Your discussion about HELOCs is getting at the idea our system employs.
>>> It works with any kind of mortgage and the homeowner does not refinance
>>> his existing note. We show the homeowner how to force changes to the
>>> amortization schedule by making precise equity transfers from HELOC to
>>> 1st mortgage. But he does not use money out of pocket.
>>>
>>> I respect your opinion, but you're simply not sufficiently informed on
>>> what's available.
>>>
>>> If you would like to learn more, then contact me directly.
>>>
>>
>> The point of a news group is to discuss topics in an open forum where
>> participants and observers can gleem information they otherwise might not
>> have or know. Technically, it is very poor form to sell products through
>> a newsgroup, indeed many groups forbid commercial postings -- your post
>> is a commercial post, by the way, because you are soliciting business.
>>
>> It is not mathematically possible to pay off a mortgage without making
>> larger payments than the amortization schedule calls for. Period. If one
>> is not taking money out of his pocket, then the outstanding balance is
>> not going down.
>>
>> You can sell a product that pays the mortgage faster but does not change
>> the buyer's standard of living IF the product captures all of the income
>> dollars and reduces the principle amount immediately and vastly. The
>> buyer/borrower still has bills to pay, and he pays them with HELOC
>> dollars (checks issued at the onset of the mortgage), but the difference
>> in total income and total outflow remains in the mortgage account and
>> reduces the principle very quickly.
>>
>> Alternatively, the buyer/borrower can change his standard of living by
>> throwing extra cash at the principle every month and reduce the
>> outstanding balance that way.
>>
>> The difference in the two methods is that the first is a true Home Equity
>> Line of Credit in a 1st Trust Deed position that gives the borrower
>> access to as much as 90% of the equity value of the home without having
>> to refinance, the latter method locks up the equity into the mortgage and
>> requires a refi in order to gain access to any equity acquired. The first
>> method, the HELOC 1st, effectively takes money from another savings
>> vehicle and moves it to the mortgage. The effective APY of the savings
>> dollars becomes the interest rate of the mortgage. Additionally, daily
>> living expenses and regular bills that are paid through the HELOC checks
>> will transfer those bills to mortgage interest, which then become a tax
>> deduction.
>>
>> Let's say you make $7000 per month. Your mortgage is $3000, and the rest
>> of your bills -- utilities, credit cards, groceries, car payments,
>> etc. -- add up to $2000. Your mortgage and bills are $5000, your income
>> is $7000. These numbers would put $2000 into savings each month. If you
>> had a HELOC 1st, then you would reduce your principle by that $2000
>> instead of collect interest on a passbook account. Another thing is that
>> you get paid on the 1st and the 15th, but don't make the house payment
>> until the 25th. This parks yoru house payment for a minimum of 10 days
>> not making any money at all. If your pay check was deposited directly to
>> the HELOC account (a requirement of the program, by the way), then your
>> principle is reduced from the day you get paid, not from several days
>> after you write the check. You have a lower Average Daily Balance from
>> which to calculate interest due, and you lower the balance more, and you
>> pay for stuff with HELOC dollars that become mortgage interest that is
>> deductable from income taxes.
>>
>> It is a good program for the right kind of borrower.
>
>
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