Mortgage Payment Savings

It’s no secret that mortgage rates are at record lows. But according to many so called “gurus “, it only makes sense to refinance if you can save x or y amount of dollars. Don’t let all the guru noise or internet-babble discourage you from checking things out for your own situation.

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For example, consider someone who just purchased a home or refinanced their $200,000 mortgage several months ago. They might have a mortgage rate of 5.5%. Many “experts” would say it’s not worth it to refinance unless they can lower their rate by a full 1% without paying points. However, what if they paid $4,000 in points and closing costs and bumped up their mortgage balance to $204,000? Here’s what their situation might look like:

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Old Payment = $1,135.58

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New Payment = $1,033.64

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Payment Savings = $101.94

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If they save the $101 @ 4.5% they will have: If they save the $101 @ 6% they will have:
$6,782 in 5 years $7,047 in 5 years
$15,271 in 10 years $16,552 in 10 years
$25,897 in 15 years $29,373 in 15 years
$39,210 in 20 years $46,666 in 20 years
$76,698 in 30 years $101,456 in 30 years

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Wow!!

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If this represented your situation, and you listened to all the “gurus” telling you not to bother refinancing, you would actually LOSE up to $101,456! Do yourself a favor. Put that $101,456 back in your pocket by calling me today! Although I’m not promising that you will qualify to save exactly this much money, I will help you save as much money as possible in your situation. As a Certified Mortgage Planning SpecialistTM(CMPS®), I am committed, qualified and equipped to help you evaluate your options and make smart choices. Contact me for more information

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Email

(804) 433-1510

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20 Year Fixed Rate Mortgages are becoming the popular choice for many home owners.  Most home buyers and home owners only think fix rate mortgages come in two varieties:  30 year fixed and 15 year fixed.  Actually fixed rate home loan notes are written in many other terms including 4o year fixed, 25 year fixed, 20 year fixed and 10 year fixed rate mortgages.

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Many want a fifteen year loan as the rate is lower that that of a thirty year loan but do not like the payment.  The solution is often the unknown twenty year mortgage.  20 year fixed rate mortgages split the difference between the 30 year and 15 year options for those who can afford to spend more money on their monthly housing payment.

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www.PaulCantor.info

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According to a an article at the Drudge Report the Obama administration is about to make an executive order, that will direct Fannie Mae and Freddie Mac to forgive debt on loans that have balances over the value of the homes securing the mortgages.  They are also reportedly going to ask the GSE’s to ease underwriting guidelines.  This may open the floodgates for refinances.  According to experts this would be a last ditch effort to influence elections as it would be hard for the administration to get anything passed though both houses of congress before the November congressional elections.

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www.PaulCantor.info

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Cash-In Refinance

Jul 31, 2010

Most of us have heard about a cash-out refinance.  That is using some of the equity on a home to pay down high cost debt or to fund college or home improvements.  Today their is a new trend of Cash In Refinancing.  Home owners are bringing money to the refinance closing  to:

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– Elimiate  PMI.

– Reduce mortgage payments with the combination of lower rate & lower loan balance.

– Reducing term of loan and keeping payments the same.

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Since CDs and money market accounts aren’t paying high rates, many homeowners have decided to exchange liquidity for equity.  Beware getting this equity back into a liquis asset is more difficult that it was a few years back.  Always get advise from a financila planner and / mortgage professional.

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www.paulcantor.info  (804) 433-1510

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Mortgage Check-up

Jul 27, 2010

mortgage check-up

Like an annual physical with a family physician, it is a good idea to perform an annual physical of a mortgage.   For most a mortgage is the most important debt and when managed properly it is a an asset. When performing a mortgage check-up an experienced mortgage planner will look at a persons whole financial picture and in many cases will advise clients to maintain the course. However, life changes such as change in employment, health care, family status, and education needs may alter those plans. A good mortgage planner will help with these changes. Sometimes mortgage rates have dropped and taking advantage of lower rates may save one tens of thousands of dollars.

PaulCantor.info

(804) 433-1510

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The mortgage planning process is different than the typical “shopping for a mortgage” experience.

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The typical shopping for a mortgage experience includes:

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Wasting your valuable time trying to save $25/month by comparing rates, fees and closing costs among different lenders.

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Wasting your valuable time trying to baby-sit the mortgage company you’ve reluctantly chosen to work with.

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Being promised one thing and then getting something different.

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Being “sold” on one mortgage product over another.

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The mortgage planning relationship is about you:

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Receiving valuable financial advice and guidance that can literally save you hundreds of thousands of dollars.

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Trusting a professional who is committed, qualified and equipped to deliver what they promise.

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Experiencing a “concierge” level of service when you are in the market to buy a home, refinance your mortgage or make cash flow changes to enhance your lifestyle.

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Implementing a defined financial plan of action in helping you achieve your life goals and dreams.

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Maintaining an ongoing high trust relationship with a team of financial advisors who can help you make necessary changes in your debt, cash flow and home equity planning strategies.

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This is a relationship, not just a transaction. As such, it requires a defined system of accountability in order to work effectively. The Mortgage Planning Process consists of the following five steps:

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1. Establish and define the client-planner relationship.

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Mortgage Planner Should:

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Ask you for information about your financial situation and your time frame for results and success.

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Gather all the necessary documents before giving you the advice you need.
Clearly explain or document the services they will provide to you.

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Explain how they will be paid and by whom. Unless you are willing to pay a flat fee for mortgage and real estate equity advice, mortgage planners are typically compensated through a commission structure set up with the lenders.

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You Should:

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Clearly explain how financial decisions are made in your household and include all the key decision makers in consultations with your mortgage planner. Be prepared to share personal and financial information with your mortgage planner in order for them to be able to advise you on how best to achieve your goals.

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2. Analyze and evaluate your financial status.

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The mortgage planner should analyze your information to assess your current situation and determine what you must do to meet your goals. Depending on what services you have asked for, this could include analyzing your credit situation, real estate equity, debt situation and cash flow.

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3. Develop and present mortgage planning recommendations and/or alternatives.

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The mortgage planner should offer mortgage planning recommendations that address your goals based on the information you provide. The mortgage planner should go over the recommendations with you to help you understand them so that you can make informed decisions. The mortgage planner should also listen to your concerns and revise the recommendations as appropriate.

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4. Implementing the mortgage planning recommendations.

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You and the planner should agree on how the recommendations will be carried out. The mortgage planner may serve as your “coach,” coordinating the whole process with you and other professionals such as CPAs, CFP® professionals, attorneys, Realtors, builders, insurance professionals and other qualified advisors.

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5. Monitoring the mortgage planning recommendations through a quarterly or annual mortgage and equity management review.

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You and the mortgage planner should agree on how you will both monitor your progress toward achieving your goals. During this review, your mortgage planner can adjust their recommendations, if needed, as your life changes. Most often, this process involves periodic assessment of:

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Your fluctuating cash flow needs.

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Changing market interest rates and mortgage strategies.

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Income and career alterations.

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Family changes including:

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Children’s financial needs.

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Caring for elderly parents.

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How your real estate equity and investments are performing from both a cash-flow and “internal rate of return” perspective.

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CMPSinstitute.org

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