Over the last few years, many people squeezed into new homes using adjustable rate mortgages. With interest rates going up, you now need a new interest rate strategy
Adjustable Rate Mortgages ARMs
Adjustable rate mortgages carry a bit of a gamble for home owners. Essentially, you trade smaller interest rates and lower initial payments on the gamble rates will not increase over time. If rates stay low, you make out like a bandit. If rates increase, you need to consider your options to avoid getting stuck with a high interest rate loan and resulting cash flow problems from increased monthly mortgage payments.
For the last three or four years, adjustable rate mortgages have been offered with incredibly low interest rates. Many people used these low, low, low rates to buy homes that would otherwise be beyond their means. Starting in 2004, Federal Reserve Chairman Alan Greenspan started making noises about increasing money borrowing rates. He has followed through on these hints. Although mortgage rates arent tied directly to the Federal Reserve Bank, they are heavily influenced by it. As a result, many people are now facing tight finances.
Avoid Rising Rates
There are really only two solutions for avoiding the increase in interest rates on adjustable rate mortgages. The first strategy is to immediately convert to a fixed rate mortgage product. Fixed rates are still at historic lows when compared to rates offered over the last 50 years. By flipping to a fixed rate, you will be able to solidify your budget and finances since you will know exactly what you have to pay each month. If rates decrease in the future, you can always try to flip back to an adjustable mortgage loan.
Unfortunately, some home owners are simply going to have to face the fact they lost one the interest rate gamble. Typically, this will occur when you realize you simply cant afford to make the monthly payments required by getting a fixed rate loan. In such a situation, you are going to have to sell your home and downsize. In most situations, it is better to do this now since youve probably built up a sizeable chunk of equity over the last few years and want to avoid a loss of that equity as the market cools down. While this may sound like a disaster, it really isnt. Yes, you have to downsize, but you should still have built up a chunk of equity.
Interest rates are going up whether you want to acknowledge it or not. The time to deal with your adjustable rate mortgage is now, not when you straining to make payments.
3 Steps You Must Do If You Want To Pay Off Your Mortgage In 7 Years Or Less
One of the single largest financial purchases a person makes in a lifetime is a home. And more often than not, a home mortgage is required to fund the purchase. But how many people have been told, that the current way a mortgage is paid off, is like a cancer on our financial health? The mortgage and banking industry has offered to the unsuspecting public the 30-year fixed amortized mortgage the most expensive mortgage, a financial cancer akin to the cigarette industry offering cigarettes.
US consumers have had no other choices, but to use a mortgage, that only benefits banks and mortgage companies. Now a revolutionary mortgage program is available that will show them how to pay off their home mortgage in as little as 7 years.
Enter Money Principal Group, a company located in Utah, founded by Ariel Metekingi, anative of New Zealand. Their premier innovative mortgage product, The Mortgage Eliminator, is based on a 30 year+ proven Australian industry standard and model in use by over a third of homeowners in that country. It was later introduced to the New Zealand market, where homeowners there achieve similar results; paying off their debts and mortgage on average of 6-10 years.
This powerful new tool to combat the current financial plague of debt combines amortgage and a full-service bank account. The new “all-inclusive” type loan creates huge savings in interest payments and loan payoffs in one-half to one-third the time requiring little to no change to current spending habits or income.
How does it work? Homeowners deposit income and other assets into the newmortgage account and since it allows access like a checking account, expenses are paid out from it by check or ATM card. The fundamental part is, that when the homeowners’ money isn’t being used it sits in the mortgage account, reducing the daily loan balance on which interest is computed. This saves on average hundreds of thousands in interest over the life a typical loan and reducing interest means more money for principal; so the homeowner builds equity faster and owns their home sooner.
“What this does for homeowners, is it empowers them to take control of their financial health,” says Ariel Metekingi, founder and president of Money Principal Group. “With this new loan program, a homeowner can combat the financial cancer known as consumer debt plus current mortgage options and it allows the homeowner to reach their goals sooner in life, rather than later. This isn’t a mystical trick of numbers; it is simply taking away the interest spread banks earn and is given back to the homeowner.”
There are three steps that the consumer can take, in order to reduce their mortgage payout and enjoy a home paid off in as little as 7 years.
1. Decide what your goals are
One of the first steps with The Mortgage Eliminator program is to have a clearer picture of where you are heading financially-speaking, and decide on what kind of goals you’d like to reach. First take a look at where you were five years ago. What kind of expectations did you have than? Did you plan on certain things to happen by now? If they didn’t happen, do you have the willingness to make changes to reach those goals?
Goal setting is important, because it allows you to create a flexible plan and schedule to put into place and stick to. Imagine where you’d like to be in 5 years. What would you like to accomplish?
Let’s say some of your goals are to have an emergency fund of at least one year of your current income and you’d like to reach that amount in, say, 2 years. And another goal, (if you have a child or children) is to set aside a college fund. And lastly, you’ve been dreaming of that sports car you’ve always wanted since you were a teenager.
Now that you have some goals in mind, what would it take to reach those goals? And keep in mind that your household income will probably remain constant.
Are there current investment options or debt elimination options, which can help you reach those goals?
Using your flexible mortgage account through The Mortgage Eliminator can greatly increase your ability to save interest and money and free up resources to help you reach those goals. And it doesn’t have to drastically change your spending habits or current household income. Just determine your budget and where the money you make is spent in your life.
2. Set up a budget
The next step in paying off your mortgage quickly is to look at your current spending habits and create a budget. How difficult is this? That depends on your level of commitment and your ability to discipline yourself into reviewing your budget.
One way that helps homeowners is through the included budgeting software and personal coaching and review available with The Mortgage Eliminator, from Money Principal Group. Studies show and human nature reflects this, is that if we have tools AND a personal Coach to help create and maintain a budget, we’re far more likely to succeed. Money Principal Group states that over 90% of its’ clients achieve success with The Mortgage Eliminator system.
Think of having a coach for your personal financial education, just like a great tennis star has a coach or golf professional has a coach. How many of us rely on a coach to become financially wealthy?
With The Mortgage Eliminator, you’re given that important part, a coach to review, create and stick to a budget that creates positive cash flow, which will take you to the next steps of paying off your mortgage in less time, without any change to your current income or spending habits.
3. Get a financial review and analysis
Everyone’s financial situation is different and completely unique. Imagine your situation as the human body and financial debt (including a mortgage) as a cancer. Before a surgeon would operate on a patient, a complete review of the symptoms and where tostart cutting, is done, BEFORE the surgeon performs one cut.
Think of a financial review and analysis as the same thing as “surgical review” on your situation. What kind of mortgage are you in now? Are you a first-time homebuyer? Are you in an ARM loan and now may need to switch to a fixed rate loan?
What is your financial “picture” and your current budget? Your income, expenses, current debt and your short-term and long-term goals factor greatly into the financial review and analysis.
In order to determine just how quickly you can pay off your current debts and mortgage (or how fast you can pay off your first home, if you’re a first-timer), a financial “snapshot” or review must be completed. Taking a look at your entire picture of income, debts, and how it relates to your goals, is the crucial step, in determining how best you should start your plan.
What is the strategically best way for you to reach your goals? With a financial review and analysis from Money Principal Group, a plan is created to show you the best options that HELPS YOU in reaching those goals quickly. Only a loan that SAVES YOU MONEY is offered and if it doesn’t make strategic, financially sound sense for you, it’s not offered and a different course of action is suggested.
Is this new loan product and system for everyone? Yes, if you can achieve the simple disciplines of budgeting and currently have positivecash flow or are willing to review your budget to recover funds to create significant positive cash flow. You must be coachable and allow the your goals to dictate your planof action. If you’re willing to do that, the payoff is unlimited and getting rid of debt and your home mortgage in 6-10 years is no longer a dream, it’s a reality.
“The ability to be mortgage free within 6-10 years, quickly eliminate consumer debt and free up existing income to start a significant investment program for the future is a now a reality. This can all be possible without requiring any additional income or reducingstandard of living. The Mortgage Eliminator has empowered the individual in New Zealand and Australia to impact positively on their own financial destiny in ways, which traditionally, many could not otherwise achieve.” says Metekengki. “It is now available for the US, to achieve the same level of financial success and freedom, already experienced and proven in these international markets.”
For more information on how you can be debt-free and pay off your home mortgage in as little as 7 years, and experience the savings with the Money Principal Program using their proprietary calculator, visit www.PDXLoan.com or call 1-800-862-0784 ext 21.