My New Blog

As most of you are aware, mortgage rates have been dropping over the last week and that's great. It's great for the client and it's great for me; however, I feel that most mortgage brokers aren't really looking out for their clients but instead just looking to get their clients further in debt. Am I bashing mortgage brokers? Of course not, I'm one. But I'm a broker who explains the REAl facts behind mortgage math.

For example, if you refinance a $200,000 mortgage with a 30 year term at a 6% rate, the schedule principal and interest payment is $1,199. Did you know that the 1st scheduled payment on that loan will only put $199 toward principal but $1,000 of that $1,199 will go to interest. That's NOT 6%, that's 500% interest. Did you know month 2 will only send 200 dollars toward principal.

Brokers love to refinance their clients becasue it's so easy and the client thinks they're benefiting by saving a 100 dollars or so on the payment, and many times it can be very beneficial; however, if the broker isn't explaining the total debt implications, they're doing a disservice to their clients. What do I mean. Let me give you an example. A past client of mine called me yesterday wanting to refinance because rates are falling. His rate is currently 6.375% and he's been in the home 1 year. I can refinance him and save him 100 dollars but instead I suggested we runa FREE Money Merge Account analysis to see what would be his best option. I always like to let the math make the decision. We ran his analysis and not only will he payoff his home but also 3 automobiles that he owns (2 jaguars and a nissan pickup), IN ONLY 4 YEARS.

Let me repeat that, through the use of the Money Merge Account, my client will pay off $162,000 remaining on the 29yrs of his home and $60,000 worth of car notes in 4 years. WOW!! Yes I can refinance him but it would cost him about 2-3 thousand in closing costs and would take him back to 30 yrs instead of 29 yrs and it would only save him about 2 months on his payoff with the Money Merge Account. So my suggestion to him was to not refinance but instead sign up on the Money Merge Account and be debt free in 4 years. Besides, he has 3 teenage boys he has to put thru college. Which is better? Saving him $100 per month on his mortgage payment or helping him become debt free in 4 years and have $200,000 in cash at his disposal for his kids college in 4 years. I've know taught him how to become the bank.

Call me today to get your FREE analysis or get answers to your mortgage questions. 803-422-9777, chris@dreamhomesguaranteedusa.com.