Why have your money in a 401k or IRA and put up with the stomach churning ups and downs of the stock market. Below are the only investment vehicles that, when properly structured and funded, allow an investor to:
This is allowed under Sections 72e, 7702 and 101 of the Internal Revenue. Call me about how to become your own bank, become debt free in no time, and keep all the interest and principle you would have paid the bank.
Would you like to:
1 Have a rock-solid financial plan and a predictable retirement income that can last as long as you do – with no luck, skill, or guesswork required ? 2 Turn your back on the stomach-churning twists and turns of the stock and real estate markets ?3 Get back every penny you pay for your cars, vacations, home repairs, business equipment, a college education, and other major purchases, so you can enjoy more of life's luxuries today without robbing your nestegg! (The average family could increase their lifetime wealth by $500,000 to $1,000,000 or more using this method, without the risk or volatility of stocks and real estate) ?4 Become your own source of financing and recapture the interest you pay to banks and finance companies – reduce or eliminate the control those institutions have over you?
And do this All TAX-FREE? Then call or email me today at 803-422-9777.
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.
Wallstreet is Broke. The Government is Broke. Wallstreet is overleveraged. Now the Government is overleveraging. What does this say to you. This Fed bailout gives you the correct plan of what to do, GET OUT AND STAY OUT OF DEBT. At no other time in history are all the signs pointing to what the average american should do.
Forbes magazine interviewed the top 400 richest people in the U.S.. The question they posed to these 400 were what is the number one key to building wealth. 75% of the 400 richest people in the U.S. said "getting and staying out of debt" is the number one key to building wealth. I know you're saying, "Well that's great Chris but how do we do that"? And the survey says----The Money Merge Account.
My clients are paying off, not only their home but ALL THEIR OTHER DEBT TOO, in 8-10 years or less. You don't have to refinance your mortgage, your mortgage payment doesn't increase, your household budget stays the same and you don't even need a HELOC and it doesn't even matter what your credit score is. How do you do this? I'm glad you asked. Feel free to visit my website at www.discovermoneymerge.com/chrisbeckham.
P.S. With our new math engine, you don't even need a line of credit anymore, we'll build it for you and have you out of debt and building wealth. You don't even have to own a home to qualify for this. Take this financial crisis and make it the turning point in your life. Get out and stay out of debt. Call me today to discuss it further. You can reach me at chris@dreamhomesguaranteedusa.com or at 803-422-9777.
Chris Beckham, M.S.M., Mortgage Consultant
CLICK HERE to get information about paying off your 30 yr mortgage & all your debt in 8-10 yrs OR LESS!
Http://848478.uffmarketing.com
Subprime mortgages have now been credited for bankrupting well over 110 lenders and seriously damaging operations at many major mortgage firms. They've reportedly wiped out 5 hedge funds, tens of thousands of jobs, and have led to millions of foreclosures with millions more on the way. And, as if that weren't enough, subprime mortgages are also blamed for massive volatility in the stock, bond, credit, futures, and real estate markets here in the US and around the globe. Some say losses in the mortgage securities market alone could reach hundreds of billions of dollars this year. This means that, for any Americans looking to buy, sell, or refinance a home, they are confronting a very different market from the one that existed just 6-12 months ago. How did this happen? The recent real estate boom was fueled by a period of record home appreciation and historically low interest rates. Banks, in order to compete, loosened guidelines and began offering more funding to more borrowers through riskier, non-conforming or "exotic" mortgages. These ideal lending conditions persisted for several years, supported by high demand, historical real estate data, home prices, and massive trading volume/profits on mortgage-backed securities and other financial instruments on Wall Street. Then, in 2006, a slowdown in real estate led to a deterioration of home values, an increase in inventories, and ultimately to today's tightening of credit guidelines, leaving many investors unable to sell or refinance out of their existing positions. Many Americans who had tapped into their equity were suddenly tapped-out and overextended as home values fell. Foreclosures followed in record numbers and a re-valuation of mortgage bonds and other financial instruments created the credit/liquidity domino effect we're now experiencing. Unfortunately, it's going to get a lot worse before it gets better. According to the latest estimates, over 2 million subprime and Alt-A adjustable rate mortgage (ARM) holders will face payment increases of up to 30%-100% when their loans reset in the next 2 to 18 months. These loans make up less than 40% of the total mortgage market, but the negative effects, as we have seen, of increased foreclosure activity can have a ripple effect throughout the industry and around the globe. What does this mean to you and your mortgage? Sellers: If you're planning on selling your home, be prepared for an even smaller pool of qualified buyers. While some experts predict a settling of this credit crisis over the coming year, tightened credit guidelines and diminishing mortgage products could knock out as many as 15%-30% of potential qualified buyers. Now is not the time to sit and wait for the best possible price. Have a serious talk with your real estate agent. Having experienced buying/selling transactions in your area, he or she can help you price your home accordingly. He or she can also help ensure that your buyers are pre-approved and stay pre-approved throughout the entire transaction.Buyers: Get pre-approved by your mortgage professional. While there are a lot of great deals out there, getting credit is becoming tougher and tougher, and it's taking longer and longer to complete a transaction. Remember, what you qualify for today could change tomorrow in a volatile market. For those looking to refinance, keep this in mind. There is no time to delay! Communicate with your lender. Don't do anything that could negatively affect your credit, and make sure you get all your documentation in on time. ARMs Borrowers: If your ARM is scheduled to reset in the next 2-18 months, you need to schedule an appointment with a mortgage professional right away. Whether your ARM is subprime, Alt-A, or even if you have a pre-payment penalty, don't let a default or foreclosure situation sneak up on you. Did you know that your monthly payments can increase anywhere from 30% to 100% once your loan resets? At the very least, give yourself the peace of mind of knowing what your adjusted payment will be. Borrowers with less-than-perfect credit: Each week it seems lenders are shedding more and more mortgage products. Many lenders have stopped offering No-Doc loans and are reducing all forms of Stated-Income loans. While it might be challenging, borrowers with credit issues need to see a loan expert. Often they have credit repair resources and other strategies to help you reach your financial goals. Finally, there's an important concept to embrace: all markets, while cyclical in nature, are self-correcting, be it credit, real estate, stocks, or bonds. For the last 6 or 7 years, real estate was booming and riding high. The correction we're experiencing now – while it seems harsh and could get much worse – is, in a sense, "natural" and directly related to the extremely loose guidelines and perhaps overzealous lending and leveraging during the boom cycle.
"You are going to have to think anyway, so you might as well think big!"- Donald Trump
These are not your father's houses The BusinessWeek article used an index that tracks home prices as far back as 1890 to conclude that home values have historically risen annually from 0.2% to 0.8% above inflation. Using these trend lines, the article found homes to be significantly overvalued. But there are problems with drawing this inference.
First, today's homes are not the same homes that were built three decades ago. Census data show that in 1973 the median size for a newly built home in the U.S. was 1,525 sq. ft. In 2006 it was 2,248 sq. ft., a 47% increase.
Second, today's homes feature sturdier construction materials, more expensive siding, outdoor additions like in-ground pools, more complex wiring to support an increasing number of electronic devices, sophisticated heating and cooling systems, and larger kitchens (which translate to increased cabinetry). Simply, these are better homes -- and "better" here means more expensive to build.
Third, prices of inputs into the construction process are more expensive these days in relative terms. The bull market in basic materials that started several years ago has raised the costs of construction, and these costs have been passed on to the consumer.
Taking these factors into account implies that housing prices should have grown at least 2% above inflation in the past 30 years, putting the current median home price about where it should be.
Check the margins The largely fixed expense of building today's homes gets us to the next reason why most homes are probably priced near their fair value. The table below shows gross margins for a collection of eight publicly traded homebuilders. (For homebuilders, gross margins represent the difference between the price at which the home sold and how much it cost to build, inclusive of any land acquisition costs. The cost of superintendents and sales staff to move the properties is not recorded here; it's a part of SG&A and often runs above 10% of revenue.)
1998
1999
2000
2001
2002
2003
2004
2005
2006
DR Horton (NYSE: DHI)
19%
18%
20%
21%
22%
24%
27%
Centex
7%
9%
10%
11%
13%
14%
KB Home (NYSE: KBH)
23%
Lennar (NYSE: LEN)
N/A
12%
15%
16%
MDC Holdings (NYSE: MDC)
8%
17%
Meritage Homes (NYSE: MTH)
Ryland Group (NYSE: RYL)
25%
Toll Brothers (NYSE: TOL)
28%
29%
30%
26%
Average
Median
Most homebuilders operate without particularly high gross margins. Although there has been a steady rate of margin expansion since the late 1990s, note that margins in 2006 had already returned to 2003 levels, the beginning of the current housing boom.
Thus, even a 3% drop in prices would bring builders' gross margins well below the levels seen in the previous recession, threatening their profitability. (Land costs, which are not tied to increased costs of construction, would have to fall substantially to negatively influence home prices -- a general rule of thumb is that, for most residential homes, land comprises only 20%-25% of total value.)
This is important because it creates a floor for the price at which homebuilders will be willing to create additional inventory. Buyers will thus be faced with builders willing to slash prices drastically on existing inventory but unwilling to offer similar discounts on future projects.
What does all this mean for the housing market? When the financial institutions rediscover how to assess effectively borrowers' default risks, the supply of existing homes will fall fairly quickly. And the moment that the supply of existing homes begins to shrink, potential first-time homebuyers will realize that between low interest rates and homes that sell at (or below) replacement cost, they can grab the deal of a lifetime.
Objects in the rearview mirror ... In 1999, tech investors bid up pieces of paper that were backed by fictitious profits of economically stillborn companies. When the bubble burst, the search for the asset's true worth -- often close to zero -- was a painful one. But houses are a different typw of asset; they depreciate slowly and meet a need for which there is plenty of demand: shelter.
Overall, the condition of the U.S. housing market is not nearly as bad as some analysts would have you believe. So, the entire homebuilding industry is worth a closer look.
Friday, February 22, 2008Freddie Mac announced this week that it's expanding its use of risk-based pricing and increasing fees on mortgages with higher risk, and will discontinue purchases of some higher-risk mortgages altogether.
In a bulletin to sellers and servicers Thursday, Freddie Mac said the changes were a response to "continued deterioration of credit quality and declining home values in most areas of the country."
The bulletin also provides guidance on using home-price data from the Office of Federal Housing Enterprise Oversight (OFHEO) to identify declining markets where higher down payments are required.
Freddie Mac said post-settlement delivery fees charged on all mortgages sold under flow purchase contracts on or after June 1 will include a new delivery fee of 30 basis points for mortgages with loan-to-value ratios greater than 80 percent and credit scores below 740.
After June 1, Freddie Mac will no longer purchase:
First-time home buyers applying for a loan through Freddie Mac's "Home Possible" program will be required to take homeowner education classes, and all Home Possible mortgages with an LTV or total loan-to-value (TLTV) ratio greater than 97 percent must have an indicator score of 700 or better.
Private mortgage insurer PMI Group Inc. has announced that as of March 1, it will also stop insuring "above 97" loans in which borrowers make down payments of less than 3 percent (see Inman News story), and competitor MGIC Investment Corp. is discontinuing coverage of loans with down payments of less than 5 percent in 30 markets where prices are falling (see story).
In another bulletin Wednesday, Freddie Mac announced changes to selling and servicing requirements, including a provision requiring servicers to send "breach letters" to delinquent borrowers no later than 60 days after they get behind in payments, to encourage them to "immediately contact servicers to explore their workout options and avoid foreclosure."
Freddie Mac officials said they will continue to require that loss mitigation efforts continue after the breach letter is sent and that the timing requirements for referring home mortgages to foreclosure were not changed.
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