Refinance strategies
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Transcript of Refinance strategies
Harnessing the American DreamGetting The Most Value For Your Home Equity
Presented by Robert Ratimorszky
GSF Mortgage
Let’s Examine Your Options Option 1
You don’t have to do anything. I will do my best to give you all the information you need and if you are not ready to make a decision yet, that will be fine.
Option 2You can do this on your own. Every year thousands of homeowners buy/sell/borrow on their own. So when we are complete, if you choose to do this on your own, let me know and I will understand.
Option 3You can work with a traditional Realtor/Lender. If you don’t think my model of doing business is for you, just let me know. I can even refer you to some good agents in my office that might better serve your needs.
Option 4You can work with me.
Are You On The Path To A Secure Financial Future? In 2002, consumer debt in the U.S. surpassed
$1.6 trillion dollars Credit Cards account for almost half of that
debt In 2001, the average household had 10 credit
cards with an average combined balance of $8,367. The average interest rate was 18.9%
If your credit card balance is $8,000 at 18% interest and you make the minimum monthly payment, it will take you 25 years to pay off the debtThere has to be a better way!
Everyone Needs to Borrow Money Since you will need to borrow money
during the course of your life, doesn’t it make sense to borrow it as inexpensively as possible?
Avoid high-interest, non-deductible debt such as credit cards, auto loans, and personal loans. Instead, choose the better way.Get the most value for your Home Equity!
Make your Mortgage Work for You!The Old Way of Thinking:
Get the lowest-rate mortgage Start a bi-weekly mortgage program Send in additional money whenever possible to
reduce the principal balance
This is the Depression Era mindset that has been burned into the American psyche
But is it possible there is a better way?
The New Way of ThinkingThe rules have changed!
Choose the best mortgage, not necessarily the one with the lowest rate.
Subscribe to a bi-weekly mortgage plan only AFTER all other non-tax deductible and high interest rate debts are paid in full
Only send extra money to your mortgage company after you have paid yourself first!
Your goal is to make the smallest payment with the biggest tax-break
“Here are 5 great reasons to carry a big, long mortgage and never pay it off.”
Ric Edelman – New York Times Best Selling author of the New Rules of Money
1. Mortgages don’t lower home valuesYour home appreciates or depreciates whether or not you have a mortgage. In fact, most people discover that, over time, their mortgage balance falls while their home value rises – creating substantial wealth they never expected
2. Your Mortgage is the cheapest money you’ll ever buy
Most people need to borrow money during their lives, so why pay 18% to credit cards when you can borrow at rates of 8% or even less
3. Your mortgage is the best way to lower your taxes
Interest you pay on personal loans, auto loans, and credit loans is not tax deductible, but for most of us, the interest we pay on our mortgage is fully tax-deductible, making the cheapest loan you’ll ever have, even cheaper
4. Get the cash out of the house - while you still canThe main reason people turn to borrowing is because they have little or no income. But if you ever suffer a job loss, major medical, or other financial crisis, you could find yourself unable to get a home loan. That’s because lenders don’t like to lend money if you are in financial difficulty. That’s why you should get a big mortgage now, before you need it – and while you still can.
5. Your mortgage becomes even cheaper over timeDepending on the loan you choose, your payment never rises – but your income likely will. That means today’s mortgage payment becomes increasingly easy to pay!
The Rules of money have changed!
“Here are 5 great reasons to carry a big, long mortgage and never pay it off.”
Ric Edelman – New York Times Best Selling author of the New Rules of Money
A Tale of Two FriendsOur story begins with two friends, both earning $70,000 a year.
They both have $40,000 in savings and are both buying $200,000 homes
Frank Borman“The Old Way” 15 year mortgage at
6.38% APR $40,000 big down
payment $0 left to save $1,383 monthly payment
(56% tax deductible 1st year 33% average)
$1,227 average monthly net after-tax cost
Sends $100 monthly to lender in effort to eliminate mortgage sooner
Neil Armstrong“The New Way” 30 year interest-only
mortgage at 7.42 APR $10,000 small down
payment $30,000 remaining to save $1,175 monthly payment
(100% tax deductible 1st year 64% average)
$799 average monthly net
after-tax cost Adds $100 monthly, plus
$428 saved from lower mortgage payment to savings component earning 8% rate of return
Who Made the Right Choice?
Frank Borman Received $14,216
in tax savings Has $0 in savings
components
Neil Armstrong Received $22,557
in tax savings Has $83,513 in
savings components
Results after 5 years
What If Both Friends Suddenly Lose Their Job?
Frank Borman Has no savings to get
through crisis Can’t get a loan-even
though he has more $74,320 more in equity than his friend because he has no job
Must sell his home or face foreclosure because he can’t make his payments
Now he must sell in a hurry, and at a discount, in addition to paying realtor fees (6-7%)
Neil Armstrong Has $83,513 in savings
to tide him over Doesn’t need a loan Can easily make his
mortgage payments even if he’s unemployed for years
Has no reason to panic since he’s in control-remember…Cash flow is
King!
The Moral of Our Story The “Old Way” can be devastating to your
financial future You should never send extra money
to your mortgage company until you’ve paid yourself first
All of your equity is at risk until your last payment is made
Instead, put that money to work for you!
Once you have all the facts, it’s easy to make the right decision!
The Starpointe Financial Plan
INCREASECASH FLOW
Free up wasted resources Manage expenses
PRESERVE YOUR ESTATE
Help reduce estate taxes Build a family legacy
MANAGEDEBT
Consolidate debt Strive to eliminate debt
CREATEEMERGENCY FUND
Save at least three months’ income
Prepare for emergency expenses
ENSURE PROPER PROTECTION
Protect against loss of income Protect family assets
BUILD LONG-TERM
ASSET ACCUMULATION
Outpace inflation Reduce taxation
Starpointe Mortgage is Illinois’s premier mortgage provider, offering a wide array of
revolutionary concepts to help make your mortgage work for you!
How to Make Your Money Work for You Leverage old money that you are already
spending to create new money that you can save Harness the power of compound interest to work for
you, not against you
Educating and empowering our clients is our focus at
GSF Mortgage
No matter what your approach, our inventory of services can help you
Traditional Mortgage Products Fixed rate loans ARM loans Balloon loans Second mortgages
Interest-only loans Products that allow you to pay just the interest each
month, maximizing your tax benefits and freeing up more money
The Power Option Loan An ARM loan that allows you to choose from four
payment options each month, giving you maximum flexibility and control
Starpointe Mortgage has a diverse selection of mortgage products from some
of the most respected names in the industry including:
What would you do differently if you had the option to lower your monthly mortgage payment?
Would you…
Pay off high interest rate debt? Save more for retirement? Prepare for your children’s education? Build more wealth accumulating assets? Plan a family vacation? Prepare for a financial emergency?
With GSF Mortgagethe choice is yours!
Now that you know how to get better value for your money, let’s see the impact of the money you save
over time with…
The Rule of 72Divide 72 by the interest rate to find out how long it takes your money to double
Age 4% Age 8%
29 $10,000 29 $10,000
47 $20,000 38 $20,000
65 $40,000 47 $40,000
56 $80,000
65 $160,000
$10,000
$50,000
$90,000
$130,000
$170,000
$210,000
29 47 65
If You Are Like Most People, You’re Ready To Take The Next Step
Let’s get started today! Let us review the results, and take
advantage of the mortgage program that best fits your needs
It’s time for you to harness the American Dream and make your money work for you!