801-878-9946The Cash Flow Loan allows minimal and fixed monthly payments while empowering the home owner with flexibility and control. Each month choose from 4 different payment options while taking advantage of drastic cash flow potential without any out of pocket investment of your own.
The average home owner immediately benefits anywhere from $400 to $2,000 in extra liquid capital monthly; creating extra income over 5 years could be the difference of $24,000 to $120,000. In order to maximize the new cash flow try putting it towards paying off higher consumer credit debt, accessing new real estate investments, optimizing business opportunities, or investing in higher income potentials such as REITs, real estate trust deeds, or the stock market.
Program Benefits :
- Access to the lowest mortgage payments on the planet that is fixed for five years.
- 4 easy payment options that promote flexibility and control
- Full 30yr payment
- Full 15yr payment
- Interest only payment
- Minimum payment
- Creates new cash flow normally from $400 to $2000 monthly over 5 years totaling $24,000 to $120,000
- Allows your home to be used as an asset that can pay down debt easier and/or invest in other opportunities
Other Features :
- Possible payment deferment occurs when using the minimum payment due to fixed payments but adjusting accrual rates; the impact is mitigated greatly by annual home appreciation
- Investors sometimes include pre payment penalties of 1 to 3 years. The Cash Flow program is most beneficial for five years
- Payments adjust after five years. Home owners in the program plan on refinancing into the program again after five years
Utility HELOC: Money Saver
Most people have heard of a Home Equity Line of Credit (HELOC) for 2nd mortgages. However, the Utility HELOC is a revolving mortgage loan that is intended to be the 1st mortgage, or in the 1st lien position. The line of credit is secured against the home as collateral, requires only interest payments, and adjusts with the rise and fall of the PRIME index. So what is so special about the Utility HELOC?
When used correctly it can be an excellent tool that has the potential of saving more money than a fixed rate mortgage (FRM), paying the mortgage completely off in 6-10 years, while still maintaining immediate access to needed cash through the line of credit with out having to spend $3,600 in refinance charges to get access to it.
Where does your money go every month every time you get a pay check? Your checking account. In stead, why not deposit it directly into your "mortgage checking account" where it can save you money daily? With the Utility HELOC you can deposit your monthly income into the account paying down your mortgage balance, thus reducing the daily average interest charges, and then draw against it with checking to pay your monthly expenses.The result, you end up drastically reducing your monthly interest, and reducing your monthly interest payments over the life of the loan.
Now to take it a step further. What if your living expenses were $3000 per month and your monthly income was $6,000, and while using your HELOC like a checking account, you end up leaving the residual $3,000 in the account. The effect is not only drastically reducing your balance and interest payments monthly, but you will pay off your mortgage in 6-10 years and save two to three times the interest than an FRM, while still having immediate access to the cash when ever you need it! That is why we call it the Utility HELOC. Do the math yourself, you will be pleasantly surprised by how versatile and useful it can really be.
Program Benefits:
- Uses daily average balance calculations for interest charges like a credit card that can be manipulated in your favor- unlike an FRM, you only pay on what your balance is at the time of calculation
- Payments are interest-only payments allowing the home owner to control how much extra goes towards principle
- When used as a checking account, the balance is dramatically reduced while still allowing access to the money to pay monthly bills and expenditures. By depositing monthly income immediately and gradually withdrawing the daily and monthly average interest accrual is reduced
- By leaving a balance residual of the monthly pay check in the Utility HELOC the balance of the mortgage is paid off in 6-10 years, cutting total interest payments by two to three times with access to the line of credit at any time with out having to go through another costly refinance to get at it when needed
- The interest rate could be as low as 1.25% below PRIME for the life of the loan creating savings obvious in monthly and annual interest
- The home owner may draw against the line of credit for the first five or ten years , whereupon the high credit limit will gradually decrease over the residual fifteen or twenty year term of the loan to decrease to $0- while still allowing low payments like those of interest-only
- Eliminates the need to refinance, pay closing costs, etc, again.
Interest-Only Payments / 40yr Term
While it depends on the current financial goals of borrower, interest-only payments on your mortgage can magnify your borrowing power. Essentially, you get to own more home, or mortgage, for less. This is ideal for the individual that is seeking to get cash equity out of their home but wants to keep the payments lower.
It also enables the homeowner with consumer debt or other high interest obligations to use what would have been required to pay towards the principle of the home loan, and apply it towards other more immediate debt. This means the home owner can save thousands a year in interest payments almost as effective as the Cash Flow ARM.
One of the added benefits of interest-only payments is the borrower is in control with were the extra money goes. If for most of the year paying down principle is desired, so be it, the borrower can just as easily pay extra each month to pay towards principle. The home owner is not restricted or controlled.
Additionally, the interest-only payment plan can be on Adjustable rate mortgages or Fixed rate mortgages. If the more conservative, long-term borrower would like the security of having an interest rate fixed for 30 years, but still want the ability to choose a full payment or just the interest, they may do so for usually the first 10 years of the loan.
Program Benefits:
- Magnify your borrowing power, leverage more home for less
- Pay off consumer credit debt faster and more efficiently
- Gain more control of how and when to pay the mortgage down- choose where your money goes monthly
- Get interest-only payments on adjustable rate mortgages or fixed rate mortgages
Like the Interest-Only loan program, the 40yr term loan may also be exactly what fits your temperament. Reduce your payments while still paying down debt. While the payment of the 40yr term loan is not as low as an interest-only payment loan, it is generally 6% lower than the payments of that of a 30yr mortgage. This way, the home owner gets the advantage of having amortization pay down their principle, but not be restricted to that of the 30yr payment.
Program Benefits:
- Reduce monthly payments while still paying down principle
- Same benefits as the interest-only loan on a more conservative level
Debt Consolidation
Debt consolidation is extremely popular, and rightfully so. It can save you $100's monthly and $1000's yearly. It has its positives, and like anything else if done unwisely, it has its negatives; the consumer should be clear of all the possible outcomes:
Program Benefits:
- Immediate relief from high monthly debt payments.
- Conveniently consolidates all payments into one affordable payment.
- Decrease the amount of total interest paid by taking advantage of low mortgage interest rates.
- Enjoy tax advantages not available with other kinds of credit against the yearly interest payments (consult your tax professional for more information).
- Utilize the difference in monthly payments towards debt to eliminate your total debt in 6-10 years.
Lower Your Interest Rate / Shorten the Term
Lowering your interest rate on your current mortgage is probably the single most common purpose that propels people to refinance, especially during the refinance boom over the last 4 years. The benefits are obvious, lower your interest rate, lower the monthly payments, which also lowers the overall interest paid on the life of the loan.
Not as popular or used as often is shortening the term of the loan. Borrowers could save 10s of thousands of dollars over the life of the loan if they shortened their mortgage term by even 5 years.
One of the problems that occurred during the refinance boom were unexpecting refinancing home owners that thought they were doing themselves a favor by merely reducing their interest rate. Essentially, the home owner was under the impression that apples to apples if they lower the rate they will save interest payments. Unfortunately for many, while lowering their rate, they ended up restarting their amortization clock from, say 22 years at 6.25%, to 5.75% for another 30 years.
Example:
On a home mortgage of $250,000 starting January of 1996, the interest the borrower would have paid for the residual 22 years at 6.25% would have been $210,632 and finished in the year 2028.
With the new refinance of the same $250,000 starting January 2004 at 5.75% for the next 30 years the total interest paid would be $275,215 and finish in the year 2034. That's$64,583 extra the borrower will end up paying.
Conversely if the borrower had decided to do the same refinance in 2004, but instead decided to reduce the term to 20 years as well as the interest rate the outcome would have been much different.
Example:
Same scenario as above where the borrower has a 6.25% rate with 22 years remaining on $250,000 will pay $210,632 in interest and finish the loan in the January 2028.
If they refinance with a new 20 year term on the same 5.75% interest rate on a $250,000 mortgage balance in the year 2004 the total interest paid would be $171,250 and finish in the year 2024.
That is a total savings of $39,382 over the current loan with 22 years left, and $103,965 interest saved over a new 30 year loan; all for a total payment difference of $297 per month. That $297 compounds and adds up fast!
Cash-Out Equity- Access to 100%
As an alternative to Fannie Mae and Freddie Mac maximum conforming guidelines to lend only up to 95% of the value of the home, many lenders will now allow up to 100% of the value of the home as a cash out transaction without mortgage insurance. This can even be done by using many of the other programs on this page, such as the Cash Flow ARM, the Utility HELOC, and Interest Only loans.
Typically conforming guidelines require that the home owner live in their home a minimum of 12 months prior to using the appraised value to refinance their home for cash out. We actually have investors that will allow the use of the appraised value of the home for cash out refinances the day after recording at the title company. This is a wonderful tool for homeowners seeking to tap their equity in homes that have rapidly appreciating neighborhoods, investors seeking to get cash out to do home improvements before renting or reselling, or to retrieve the cash back out of the home that the home buyer put down in order to qualify for financing when they purchased.
Program Benefits:
- Get cash out over and above what conforming guidelines dictate
- Tap into equity immediately after purchasing
- Go up to 100% of the value of the home even under 12 months of ownership
Cancel Private Mortgage Insurance (PMI)
If you have private mortgage insurance, you know what it is like to pay insurance to the lender to make sure you continue to pay. All that extra monthly payment going down the drain that will never return or provide benefit or protection to you, the home owner. Private Mortgage Insurance, also known as Borrower Paid Mortgage Insurance, is designed to insure the lender, not the borrower. It is different from Home Owners Insurance that protects the borrower from hazards or loss.
Refinancing for no other reason than to eliminate paying mortgage insurance is all the reason in the world you need. There is more than one way to eliminate mortgage insurance, and the lender or broker that assigned you the loan with PMI probably didn't inform you there were other options.
Three possible other options over mortgage insurance at your current disposal could be:
- Refinance, and have the lender pay the mortgage insurance for you by raising the interest rate typically by .5%
- Split the risk of the loan up into two separate loans, the 1st no higher than 80%, and the 2nd with the residual up to 100% loan to value
- Get a new appraisal that supports a value substantiating the current loan balance as no higher than 90% loan to value for some adjustable rate mortgages, or 80% loan to value for fixed rate mortgages
Program Benefits:
- Eliminate unneeded mortgage insurance, save money
