certified mortgage planner: Just How Hard Is It to Make Money? - 06/06/08 09:35 AM
You know I am an advocate of investing versus paying off your mortgage, at least until you have your entire financial and investment plans fulfilled.  You know that the reasons come down to liquidity, safety and rate of return, the latter being the point I am going to target today.
Most Americans, and especially those falling prey to the glamour of a paid off mortgage through mortgage acceleration programs such as the Money Merge AccountTM from United First Financial, do not realize the true cost of their financial decisions.  They fail to realize that Everything is 100% Financed!!!  Yes, even when … (4 comments)

certified mortgage planner: Money Merge Accounts: Are They Really Worth It (Another Case) - 07/19/07 09:14 AM
A UFF agent placed the following scenario of a client he was putting into a Money Merge Account on one of my blog posts...
The client had just closed on a $244,000 mortgage at 6.875% Fixed for 30 years, which creates a $1,602.91 monthly payment since it is fully amortizing.  I wish I had talked with this client before he closed as I could have saved him thousands.  The client makes $4,616 per month, of which $1,000 is said to be discretionary.
The UFF agent goes on to provide a fairly accurate representation of what the client could do on his own versus … (17 comments)

certified mortgage planner: Florida Mortgage Market Update - 05/17/07 03:39 AM
We remain in a LOCKING stance.  Mortgage Bonds = -16bp
Mortgage bonds traded flat yesterday in the absence of any major economic news.  Today shows a different picture.
As we informed you that the 200-day MA failed to maintain support and keep bond pricing above this critical level, price erosion was likely to occur and we are seeing just that. 
Initial Jobless Claims came out today lower than expectations, which shows a tightening labor market.  While you may think that is good news, it is actually bad news for bonds as the fear of increased wage-based inflationary pressures do not bode well for the … (4 comments)

certified mortgage planner: Money Merge Accounts Vs Equity Harvesting: Harvesting Wins by Over $1.5M - 05/16/07 03:14 AM
This is actually another look at the whole Money Merge Account, Mortgage Acceleration post I did a while ago that spawned a lot of debate.  Click the link below to see that post if you have not already read it.
Money Merge Accounts: Are They Really the Best Thing for You?
Now for the real "blow your mind away" data that really proves that Money Merge Accounts (MMAs) and other mortgage acceleration products are going to cost you in  the long run.  The truth is that Equity Harvesting can generate tremendous wealth for those families that are able to follow the plan.  … (43 comments)

certified mortgage planner: With Foreclosures on the Rise, Is Your Home Really Safe? - 05/15/07 03:20 AM
Well, if you are paying your monthly mortgage payments, your home is safe, for now.  Unfortunately, many home buyers have the misconception that paying down their mortgage quickly is the best method of reducing risk of foreclosure on their homes.  That's right, even the Money Merge Accounts (MMAs) and other Mortgage Acceleration programs fall into this category.
You see, many people who scrape up every bit of extra money they can to apply against principal often find themselves with no liquidity.  Having an ALOC, HELOC or other mortgage product can help, but they can also be expensive.
When tough times come, and they … (11 comments)

certified mortgage planner: Are You Trying to Pay Off Your Mortgage Faster? If so, Read This...(Part 2) - 05/09/07 05:17 AM
(If you did not read Part 1, please go back and read it as that is the basis for this post.)
In the last post, we left John without a job the couple was forced to sell their home at a loss to avoid foreclosure.  We also mentioned how they regretted their decision.
So, with continued analysis, let's first look at how they could have done better even with a 15-year mortgage and we will assume the couple has no financial difficulties.  John and Jane made a decent amount of money and found themselves in the 31% tax bracket and stated they planned … (4 comments)

certified mortgage planner: Are You Trying to Pay Off Your Mortgage Faster? If so, Read This...(Part 1) - 05/09/07 02:30 AM
Most Americans dream of owning their own home, and owning their home free and clear of a mortgage.  While that may be a noble goal, they go about it the wrong way.  To assist in emphasizing this fact, we will take a look at a couple who are trying to decide which loan is better for them.  Here is their scenario...
John and Jane are in their early thirties and expect to be working for another 30 to 35 years before retiring.  Traditionally, most couples in their position would have gone for the 30-year conventional home mortgage.  John and Jane, however, have … (5 comments)

certified mortgage planner: Watch Out for Falling... - 05/07/07 06:28 PM
I was doing some research today and looking into the future of the mortgage market.  It never seems to fail that technical indicators portray a good glimpse of the future, and with that in mind, I am off to predict the future of interest rates.
Many of you may know that I run another blog off my main mortgage site that posts updates on the mortgage market and provides locking guidance for those that choose to float.  I get this information from several different resources as I do not like any one opinion, another thing many of you may already know about … (29 comments)

certified mortgage planner: Are America's Housing ATMs All Tapped Out? - 04/30/07 07:44 AM
Today saw the release of the US Savings rate, which improved from the last reports.  It is still in negative territory at -.8%, but is up from -1.2%.
I know, many of you probably don't follow this number, and some may not even know what it means.  Basically, its interpretation is that Americans continue to spend more money than they make, hence the negative number.  It does leave out some information such as house appreciation (or depreciation). 
What it means to us in the real estate market, especially those doing mortgages, is that there is still a major need for Americans to … (3 comments)

certified mortgage planner: How to Earn Money by Borrowing at 6.0% and Investing at 4.0% - 04/25/07 07:23 AM
This article is about the benefits of proper mortgage planning and how they can lead you down a path to true financial freedom faster than you thought possible, even faster than an MMA can get you there.  The goal is to show you how you may be able to use your mortgage to accelerate your financial and investment plans and grow your wealth more over time.
For starters, and to make calculations simple, we will say you take out a $100,000 mortgage at 6.5% (30 year fixed, fully amortizing) and invest the money in an investment vehicle earning 4%.  This scenario is … (23 comments)

certified mortgage planner: Lower Interest Rates Ahead? - 04/24/07 02:23 AM
At 10am EDT this morning, two normally moderate impact reports were released that is currently moving the markets.
Both Existing Home Sales and Consumer Confidence were released this morning and both missed expectations.  What does that mean?
Continued weakness in the housing market is apparent based on the Exisitng Home Sales numbers, but further insight will be provided with tomorrow's New Home Sales numbers.
Consumer Confidence is also dropping, indicating that Americans are lowering their expectations of the economy and the future.  It is directly correlated to the strength of consumer spending.  Lower confidence numbers generally decrease inflationary fears and ultimately drive prices higher … (5 comments)

certified mortgage planner: How to Make $125K Tax-Free in Addition to Rental Income - 02/26/07 01:05 AM
If you are an avid real estate investor who likes to keep rental properties for a reasonable period before selling, then there is a way for you to make $125K tax-free over and above the rental income you receive.  For this scenario, we will assume you are single simply because those that are married (even though you could double your tax-free income potential) would not want to do what is required.
If you are a real estate investor and single, then you could incorporate a strategy that allows an extra tax-free income, up to $125K annually, in addition to the rental income … (5 comments)

certified mortgage planner: Money Merge Accounts: Are They Really the Best Thing for You? - 02/21/07 01:37 AM
This revolutionary product is a good product for some, but the reality is that it may prove more costly to you over time.
Money Merge Accounts, or whatever else companies would like to call them, are good loan products for certain families.  However, if you are a disciplined family and want increased safety and rate of return for the long run, these products will ultimately cost you considerably over time.  A family who came to me to ask about these programs and if it was best for them ultimately realized they could do better.
This particular family is what I would call the … (141 comments)

certified mortgage planner: Which is the Safer Investment - Home Equity or Burying Your Money in the Backyard? - 01/28/07 11:07 AM
Your first reaction to this title is what the heck is he comparing these two for, it is clearly home equity, right?  Well, let's take a closer look at these two "investments".  In order to do this, we have to understand the three areas that determine a good investment...liquidity, safety, and rate of return.
Let's start off with the rate of return.  Obviously, if you bury your money in a tin can in the backyard, you will not have a positive rate of return on the money.  In fact, you will lose money due to inflation.  Home equity is the same way, … (8 comments)

certified mortgage planner: Even the Wealthy Need Financial and Real Estate Education! - 01/24/07 04:07 AM
I was reviewing an article in the Wall Street Journal and how it highlighted the fact that even the wealthy are heading back to school to learn about how to manage their money.  The article highlighted several courses at various colleges and some companies that offer specialized courses.  The biggest question that arises is, "How do I know if my advisor is doing any good?"
Well, I cannot speak from a real estate agent perspective, but from a mortgage planner's perspective, this shows the window of opportunity is wide open.  If you do not already offer classes, seminars or something of educational … (2 comments)

certified mortgage planner: Knowing When to Place Limits on Your Business - 01/20/07 03:13 PM
The New Year came in full force for me this year and I am faced with a dilema I am sure most of you would like to have.  The problem is that I allowed myself to bite off more than I could chew.  Actually all this happened last month which is why my blogging, comments, and free time disappeared for a while, except sporadic appearances.  It is also the reason I am posting this late Saturday night.
What happened?  While I do not know exactly what caused the rapid increase in my business as the year wound down, but I can say … (10 comments)

certified mortgage planner: Interesting Way to Forecast the Destruction of a Market - 01/09/07 01:13 PM
In the January issue of Money magazine, there was a small little feature which showed the correlation between the movies coming out of Hollywood and the following devestation on the markets portrayed in the movie.  While the snippet focused on how hedge funds are going to meet their turmoil soon, it portrayed a very interesting way to forecast problems in any market.
The article showed how back in April 1987, the movie Wall Street started filming.  For those of you who do not remember this movie, it portrayed a young stockbroker who was seduced by the wealth and the "get rich quick" … (6 comments)

certified mortgage planner: Is Your Nest Egg Cracked? - 12/26/06 05:49 AM
When it comes to your retirement nest egg, are you certain that you will have enough.  There are a few things that may causecracks in your nest egg that you may not have planned for.  Things like rising health care costs, your planned life expectancy and social security (or lack thereof).  So what effects are we likely to see?  How big of a crack will your nest egg have (and is it already cracking?)
Health care costs are on eof the big areas of concern.  Long term care is one of the areas of concern regarding health care.  But I am sure you … (2 comments)

certified mortgage planner: Need Long Term Care? Mortgage Planning May Help - 12/20/06 07:16 AM
About a month ago, an issue of Investment News contained an article discussing the importance of long term care options for clients.  According to a study by the American Society on Aging, more than 70% of all Americans reaching age 65 will need long-term care at some point in their lives.
Common health issues that are driving this are heart problems, hip fractures, strokes and alzheimer's disease.  These conditions, and others, are likely to place large financial burdens on seniors and their families.  Since the majority of people are living longer, there is added financial strains that have not created a large … (5 comments)

certified mortgage planner: Everybody's Gonna Get Memed!!! - 12/18/06 01:50 PM
Jeff Belonger just contacted me today and said I had been memed.  My first reaction was, what the heck is that?  Is it good?  Is it bad?  I need more information. 
Fortunately, Jeff included a link to his blog where he memed me.  He did a brief explanation and that gave me enough info to go by and understand it is a great thing to get memed.  Why?  It allows your fellow ARers to get to know you a little bit better.
So what is it?  Apparently it was started by Mary McKnight, you know the Web 2.0 guru here spreading great … (11 comments)