HOA Presentation (Lo Presentation)3

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Slide 1: 

Copyright 2005 CMG Financial Services, Inc. All rights reserved. Revocable license for use is granted to Certified, approved CMG Mortgage, Inc. broker partners with applicable state licenses in good standing, and does not convey any rights or title to elements contained herein. No changes without copyright holder’s express written permission. Program terms subject to change without notice; Adjustable rate line of credit; interest savings and payoff timing will be affected by payments, draws, and interest rate environment, and loan balance may increase if withdrawals exceed deposits. “Home Ownership Accelerator” and the yellow flying house logo are trademarks of CMG Financial Services, Inc.

Slide 2: 

1 Fact…#1 The most expensive mortgage a bank sells is a 30 year fixed rate loan. Longest Term = Most Amount of Interest.

Fact…#2 : 

Fact…#2 2 A 30 year Fixed rate mortgage at 4.500% has an interest charge is 82% of the original loan amount. How much interest will you pay?

Fact…#3 : 

3 Fact…#3 In the first 5-years of a 30 year fixed rate loan, you pay 25% of the total interest charge. In fact, it takes 19.2 years for your monthly payment to actually equal 50% interest and 50% principal with a 30 year fixed rate mortgage.

Fact…#4 : 

4 Banks do not give consumers the same rates on their checking and saving accounts that they charge for a mortgage. Fact…#4 Savings rate of 1.650% & Mortgage rate of 4.723%

What if there was something better? : 

5 What if there was something better? What if your mortgage could cost you what you earned with your checking and savings account? 3.5% Mortgage Rate 3.5% Checking / Savings Rate Would you pay off your mortgage faster?

Introducing… : 

6 Introducing…

Now Available in the USA : 

7 Represents up to 33% of all residential loans in Australia and Great Britain $100B per year in Australia Transactions powered by: 1 Now Available in the USA

First, it’s NOT a MORTGAGE : 

8 First, it’s NOT a MORTGAGE It is… A Home Equity Line of Credit Tied to the L.I.B.O.R. Index A faster way to own your home 3

Current situation… : 

9 Current situation… 4

What if we combine the two? : 

10 What if we combine the two? + = 5

Change how your money works… : 

11 Change how your money works… Don’t Earn less than 1% Save 5.000% Lazy Money + Home Loan = Interest Savings 6

…and keep the same flexibility! : 

12 …and keep the same flexibility! Unlimited Check Writing 24/7 Access to ATM’s Free Online Bill Pay Visa/Debit Card 7

What others are saying… : 

13 What others are saying… 8

Line of credit -- structure : 

14 First 10 years: Credit line amount is level. Interest only. Last 20 years: line decreases 1/240 per month Interest + principal required. Interest added to loan balance automatically No checks to write if below credit line. Line of credit -- structure 9

Let the Interactive Simulator prove it! : 

15 Let the Interactive Simulator prove it! Use the Interactive Simulator Interest costs Payoff timing 10

Slide 17: 

16 Income

Slide 18: 

17 Debts

Slide 19: 

18 Expenses

Slide 20: 

19 Loan Setup

Slide 21: 

20 Results

Slide 22: 

21 CMG’s Client Liaison If your clients have any questions or concerns all they need to do is call CMG’s client liaison 17

Slide 23: 

22 Why is the loan so effective? The loan works in two ways! 19

Extra Payments to Principal : 

23 Extra Payments to Principal $500,000 mortgage for 30 years @ 6.000% = $3,000.00 mortgage payment. 1 extra mortgage payment per year for 22 years pays off the mortgage!..... savings $222,000 in interest. So why don’t people do it? Because mortgages are closed end, instruments and any extra payments are permanent, they may need this money down the road. So they keep their money in their checking account and savings accounts earning almost nothing! With the “Home Ownership Accelerator” you can flexibly add all of your extra money to your mortgage knowing that if you ever need the money back you can always get it! 20

Interest Is Calculated Daily : 

24 Interest Is Calculated Daily $500,000 Mortgage $10,000.00 Paycheck, $490,000 balance Interest is calculated at $490,000 Even though you spend most of your paycheck your daily balance is going to be less. Interest is calculated on your daily balance which is going to be less and paying less interest leaves more of your money for principal, so you pay off years sooner compared to a traditional mortgage. 21

Slide 26: 

22 What is the rate? Index + Margin = Rate

1 MO LIBOR : 

26 23 1 MO LIBOR 19 Year Average of the 1-Mo LIBOR is 4.500% Rates as low as 3.500%

Slide 28: 

27 When will rates rise… …when the economy recovers. Most experts believe it will take the US up to 5 years for a full recovery for the following reasons: 1.) Persistent Unemployment 2.) Heavy new government intervention into the economy (upsetting free market activity) 3.) New realities around availability of capital for investments (tightening of credit) 4.) Inflation remains nonexistent (high unemployment) and deflation is actually the larger concern now.

Slide 29: 

28 Example -1 : 30 Year Fixed: 500k Loan Amount at 5.375% = $2800 per month Loan balance at 5 years = $461,531.22 Principal Pay Down = $38, 468.78 Home Ownership Accelerator: 500k Loan Amount at 3.5% IO = $1458.00 Extra Payments towards principal (interest rate savings) = $1342.00 ($80,520.00) Extra Payments towards principal (left over money in checking account) = $30,000.00 Principal Pay Down = $110,520.00 Based on the above, interest rates would need to go to 8.750 at the 5-year market for the borrower to be making a payment of $2800.00 per month. Where will I be at 5 years?

Slide 30: 

29 What if you have liquid assets? Example -2 : 30 Year Fixed: 500k Loan Amount at 5.375% = $2800 per month Loan balance at 5 years = $461,531.22 Principal Pay Down = $38, 468.78 Home Ownership Accelerator: 500k Loan Amount at 3.5% IO = $1167.00 (based on 400k ) Checking account balance $100,000 Extra Payments towards principal (interest rate savings) = $1633.00 ($97,980.00) Principal Pay Down = $97,980.00 Based on the above, interest rates would need to go to 8.375% for the borrower to be making a payment of $2800.00 per month.

Take Action! : 

30 Take Action! 24 Do something with this information Tell a friend, a relative, do your research, Just do something! And remember: Your money is either working for you, or it’s working for somebody else.

Slide 32: 

31 25 Do not let this opportunity pass you by…..

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