|
|
|
LET YOUR MORTGAGE MAKE YOU MONEY |
|
|
|
|
|
|
|
|
A 30 year fixed rate mortgage paid “Interest
Only” years 1 through 10 |
|
|
|
The remain 20 years converts to a fully
amortized loan. During this portion
of the amortization you will make a full “PITI” payment as you benefit from
your investments during the Interest Only Phase. |
|
|
|
|
With a conventional mortgage |
|
you pay monthly interest as a |
|
cost of doing business |
|
|
|
The monthly principal portion of |
|
your payment is a forced savings |
|
program that repays your loan |
|
|
|
|
A Conventional Mortgage contains a monthly |
|
interest and principal payment. |
|
|
|
Example:
$100,000 @ 7.25% for 30 years: |
|
|
|
Monthly Interest $604.17 |
|
Monthly Principal $ 78.01 |
|
Monthly Payment $682.18 |
|
|
|
|
Your mortgage is repaid by investing your
monthly principal payment at the |
|
mortgage rate yield over the term. |
|
|
|
$78.01 @ 7.25% invested monthly |
|
for 30 years = $100,000 |
|
|
|
|
Monthly Payments $100,000 |
|
30 yrs. @ 7.25% |
|
|
|
Conventional: $682.16 P&I |
|
|
|
Interest Only $604.17 Interest Only |
|
$ 78.01 Investment |
|
$682.16 Total |
|
|
|
|
In the 10th year you pay down your
mortgage $9,361.20 (78.01 * 120) |
|
|
|
OR |
|
Invest $78.01 at 10% for 10 years; which will
grow to $15,979 and increase your equity position by an additional $6,617. |
|
|
|
Which would you choose? |
|
|
|
|
|
|
|
|
You may use your monthly principal payment to
purchase any investment or invest in your retirement. |
|
|
|
The lump sum benefit may be used |
|
for college funds, home improvement, or mortgage
principal reduction. |
|
|
|
YOU MAKE THE CHOICE ! |
|
|
|
|
The average homeowner moves or refinances every
5-7 years. |
|
|
|
Most return to a 30 year mortgage. This can be financially
devastating. As a long term
investment it is not always in your best interests to move investments
frequently. Thus, investing the
“principal” portion provides a portable solution to this trend. |
|
|
|
|
PAY YOUR MORTGAGE OFF |
|
AS SOON AS POSSIBLE |
|
|
|
OR |
|
|
|
NEVER PAY YOUR MORTGAGE OFF |
|
|
|
|
A $100,00 conventional mortgage is reduced by
approximately $7,011 or 7% in the first 5 years and $34,246 or 34% in the
last 5 years |
|
|
|
A borrower who refinances to a new 30 year
mortgage in the 5th year reduces his new loan by 7%, but loses
34% in principal reduction on the original loan by extending the original
term they will pay off their mortgage by 5 years. |
|
|
|
|
1. Maintain your present payment (The
over-payment |
|
will
pay your new loan off early) |
|
|
|
2. Amortize your new loan over the remaining
term |
|
of
your old loan |
|
|
|
3. Invest your monthly savings at a yield higher
than your mortgage rate |
|
|
|
4. Use an interest only loan and invest the
difference |
|
|
|
|
The “Interest Only” mortgage is a fixed rate
mortgage that has an interest only payment option for the first 10 years. |
|
|
|
Should you elect to pay interest only, the loan
automatically begins amortizing over the last 20 years. |
|
|
|
|
Total Monthly Payment Years 1-10 $ 682.18 |
|
Total Monthly Payment Years 11-30 $ 790.38 |
|
Payment Increase $ 108.20 |
|
|
|
Existing Investment Fund $ 15,979 |
|
10% Yield years 11-20 = $117,095 |
|
|
|
|
Your home may be your most prized and valuable
asset. |
|
|
|
Should you feel the market turning or feel
uncomfortable with your investments, pay down your loan with your profits
and begin to amortize the balance over the remaining term. (Your loan coupon will give you the option
to do so) |
|
|
|
This assures your loan repayment over the
specified term or sooner. |
|
|
|
|
This example presentation is based on Excel
Formulae and is in no way guaranteed.
Past investment performances do not indicate future results |
|
|
|
The Interest Only Mortgage is strictly a
mortgage that has the ability to free up home equity. The hamlet-irracional.com nor
its affiliates are not permitted to give advice on securities related. |
|
|
|
Consult your financial advisor and/or accountant |
|
|
|
ALL RATES AND TERMS SUBJECT TO CHANGE |
|
WITHOUT NOTICE. |
|
|
|
