|Wealth Building Information|
Turn That Fixed Rate Mortgage Into A Goldmine
When you purchased your home, you most likely got a fixed interest rate mortgage with a 15 or 30 year term. These are the most popular mortgages in the industry. Even in the summer of 2004, when the interest-only or simple interest mortgage loans became popular, the average American stuck to the fixed rate. You see, the fixed rate offers security to conservative people, and the average American home buyer and home owner is a very conservative person.
Today, it's time to ignore that conservative nature and throw out that fixed rate mortgage. If you have a home, no matter when you purchased or refinanced your mortgage, you now need to refinance your fixed interest rate mortgage to an adjustable rate mortgage.
Now, before you begin to panic and start calling me all kinds of unsavory names, read on, and you'll see why an ARM is actually a cash goldmine, and you need to start panning for this gold immediately.
When I was originating loans fulltime, I could barely get the word ARM out of my mouth, before the customer would say, "Oh no! I don't want an adjustable mortgage. I've heard how the rates change and your payment skyrockets, and some people actually lose their homes. No, no, I don't want my rate to change." Of course, once I illustrated the thousands of dollars they would save in just a few years and quashed all of those myths about loan payments "blowing up," most of them decided the ARM was not the "devil loan" it's made out to be.
But why risk an adjustment of your rate, you may ask, when you can have it fixed for the life of the loan? The answer is twofold and quite simple. The first part is the most important, and that is the average American either sells or refinances his or her home in four to seven years. So, if the chances are that you'll sell or refinance in five years, why fix your rate for 30 years at a higher interest than you can get on an ARM?
The second reason to get an Adjustable Rate Mortgage is because the interest rates are so much lower than fixed rates. And since these great rates are fixed for a particular period, five years on a 5-year ARM and three years on a 3-year ARM, there really is no risk, at all. Again, in most adjustable rate mortgage programs, the interest rate does not adjust monthly or yearly (although programs with these types of adjustment periods do exist at much lower rates).
For example, as of publication of this article in 2004, the 30-year fixed rate mortgage was going for around 5.75%, and a 5-year Adjustable Rate Mortgage was going for about 4%. Suppose you're financing $100,000. The 30-year fixed rate of 5.75% would give you a monthly payment of $583.57 (not including your taxes and insurance, which vary from state to state and county to county). The same $100,000 financed at 4.0% interest yields a monthly payment of $477.42. The difference in these two payments is $106.15. This is $1,273.80 each year, and $6,369.00 for five years. I can hear you saying, "Wow, that's hard to believe," but these are real numbers and real savings. You may be saying, "Sure, but the rates change." This is true, but the difference in the fixed rate mortgages and the ARMs is almost always the same, regardless of what rates the market bears, so you'll always save a ton of money in the difference in these two payments.
The numbers are even more staggering if you finance $150,000. The fixed rate payment is $875.36 and the 5-year ARM payment is $716.12 - a monthly savings of $159.24 and over $9,500 for five years. If you buy or refinance a home and finance $200,000 or more, you'll save between $13,000 and $15,000 over five years, with the 4% rate as opposed to the fixed rate of 5.75%.
Bank that money and you can buy a decent car for cash, or pay for a year of college, or take a European vacation. Pretty powerful stuff, huh? Now, if you're one of those people who is really into cutting into the term of your mortgage, and you can afford the higher fixed-rate payment, simply apply the difference back to the principal loan amount. You'll build equity in your home very quickly, and you'll always have the option of paying the lower payment.
So, get your adjustable rate mortgage today, and start using your own personal goldmine.
Mark Barnes is author of the wealth-building system, Winning the Mortgage Game and other investment real estate books. He is also a suspense novelist, and his new novel, The League, will thrill both suspense and sports fans. Learn about Mark's wealth-building system and get his free home loan course at http://www.winningthemortgagegame.com. Learn more about The League and read an excerpt at http://www.sportsnovels.com
This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news
Houston realtors to host Community Wealth Building Expo helping black homeowners this weekend - CW39
Stop Losing Thousands of Dollars Every Day: Six Tips For Creating Wealth
We all go to school for about twelve years, kindergarten through high school. Some of us go to college and then graduate school.
Getting An Offshore Bank Account Via The Internet
There is no need to use the many middleman websites you will find via a search engine. Most of these are *bogus*, even the slick-looking ones.
A New Paradigm Shift In Earthly Wealth
Hello,If you dont understand this yet, or have not heard of opportunity investment, you are about to venture into a new life for yourself and your family.My own fiscal transformation occurred several years ago, yet its not over yet, I've just begun.
I Dont Need A Financial Coach To Help Me!
You've been thinking that your financial life could probably be better, right? Maybe you think, "If I could just stick to a budget everything will be fine?", or how about "When I get that next raise or promotion, I'll have enough money to pay off my debts and save some money?" You may even be thinking,"I can do this on my own!"I hear these comments and more on a regular basis. I usually say, "Great! Can you think of any reasons your financial life isn't perfect right now?"It's really your "little voice" which is prompting you to say all these things! Your little voice has a job to do and that is to protect you from any change because it "knows" that change will be hard or scary or cause more work and it's just easier to keep things the way they've always been.
Offshore Strategies & Services
Offshore strategies may or may not be right for you. Moreover, there is a right way and a wrong way (legal and illegal) to execute offshore strategies.
Who Will Become Wealthy in the Information Age?
As you know, we're now well and truly in theInformation Age. It began about 10 years ago.
16 Mantras for Building Financial Wealth
Everyone wants to be wealthy, but most of us do not have anyone to guide us down this road. Even if we stumble upon a mentor, most of us may think it's a scam.
You Can`t Cheat An Honest Man
Author: James Walsh ISBN: 1563431696: Publisher: Silver Lake PublishingIn 1903 Charles Ponzi arrived in the USA with the aim of becoming as wealthy as Rockefeller. His modus operandi was based on the principle of robbing Peter to Pay Paul.
Net Worth Nympho
There are plenty of people who are in love with their bank books. In life, there will always be extremists.
Residual Income - 3 Ideas for Long Term Profits
A residual income is one that comes in no matter what--even when you are not working (or can't work.) It's something all of us will someday want and possibly need.
The Old Monied Dupont Nemours and Roosevelt Families Buy a Tax Haven
This 4,000 acre sale (now a marina and resort town - with an airport for jumbo jets (the $50,000,000 airport was donated by the UK government) went down in the 1970's - not the 1870's!?!?Source: A Turks & Caicos Government 3 full page advertisement in Investor's Daily (1985).Was this the most profitable real estate investment of the 20th century? A quarter acre lot in the gated community of Sandyport here in Nassau, Bahamas sells for approximately $260,000 today.
How to Save Money and Take the Vacation You Always Wanted
Many people don't realize how much money they spend on convenience and boy does it add up. I am going to share some of my frugal and practical tips of how to save money for the vacation you always wanted.
The Wealthy Mindset
What is the difference between wealthy people and poor (even average) people? It is not all the money that wealthy people have and the average don't, nor the luxury, nor the lifestyle. It is their mindset.
A College Degree or an MBA is NOT NEEDED to be Financially Free
Look at Forbes' top 10 United States wealthiest people. Notice the top five "self made" billionaires (excludes the Waltons who's net worth is due to inheritance) are college dropouts.
Lesson 1 - Why Arent You Wealthy?
We will start the Financial Fitness System with the assumption that you are out of shape financially or you would not have decided to subscribe to the course. So, again, why aren't you wealthy? There are some exceptions, but for the majority of the world it's the same reason.
What it Means to be Rich
Many people have a false understanding of what it actually means to be rich. If you were to ask a stranger what makes a person rich, he or she would say "A person is rich if they have a lot of money and can buy whatever they want!".
Who Wants To Be A Millionaire?
Steve Martin once delivered an opening monologue for Saturday Night Live in which he answered the age-old question "How can I be a millionaire?" His answer was fairly simple and straightforward, "First? get a million dollars." If at this point you can't help but feel that Mr.
Get Rich Doing What Others Dont
"The quickest way to wealthThat I've found to be true;Is to stick out your chestGive your bestAnd do what others don't like to do!" - PrimmIt's been said the difference between the "haves" and the "have-nots" - can be traced back to the people who did ..
Spiritual and Emotional Money Goals: The Keys to a Financially Free Future
Are you setting the right money goals?Most people believe having more money would mean having more security. Right? Wrong.
Do You want to Live on Macaroni and Cheese when You Retire or Filet Mignon?
How Much Money Will I Need to Earn to Retire?This is the most common concern of people who are contemplating retirement. While most financial planners would tell you that you need to earn as much in retirement as you did while you were working, this isn't always the case.
|home | site map|