Mortgage acceleration is basically paying more towards your principle than the schedule payment. If your payment is $1,000 per month and you send in $1,001 or more, you are accelerating your mortgage.
Let’s look at a very simple example…
You have a $100,000 mortgage at a 6% interest rate. Your payment is $599.55 per month for principle and interest. The total amount of interest scheduled to be paid over the life of the 30 year mortgage is $115,838.19. Now, if you pay $50 (total $649.55) more towards your first mortgage payment, your total interest over the life of the loan would now be $115,588.56. You will save $249.63 on total interest charges, simply by paying $50 more on your first payment.
There are several types of products that can aid in accelerating a mortgage:
1) 15 year mortgage – The 15 year mortgage operates the same as a 30 year mortgage, but you will pay half the total, overall interest, of course with a higher monthly payment. For instance, at a 6% rate on a $100,000 loan, your payment would be $843.46 per month and your total interest charges will be $51,822.13.
2) Bi-Weekly Mortgage – This is where you pay half your mortgage payment every two weeks. In essence, you make one more monthly payment every year. Looking at our 30 year example, on this option you would pay $90,196.39 in total interest. My personal recommendation is that this is the worst method to accelerate your mortgage, and I will elaborate in later editions of this article.
3) Satori Wealth Building System™ (SWBS™) – Our exclusive system is the best system on the market for mortgage acceleration and the reason is, it uses the power of your entire paycheck on a monthly basis. It will pay off your home faster than any option available in today’s market. Two of the major components to be eligible for the SWBS™ are: disposable income and equity. Now, these aren’t the only factors necessary to run the system as there are a wide range of setups.
It would be in your best interests to contact our specialists to find out just how the SWBStm could work for you.
Why do it? The average American does not fully comprehend just how much interest is paid over the life of their mortgage, while at the same time being compensated so little for the money they run through a bank account.
In many cases, people can save tens of thousands of dollars in interest over the life of their loan simply paying a little bit more every month. If you are interested in saving thousands of dollars in interest on your mortgage, check out our Your Satori calculator and find how much you can save.
Tuesday, September 23, 2008
Tuesday, September 2, 2008
What is a FICO™ (credit score)?
A FICO score is a credit scoring system that is commonly used by financial lenders to evaluate the borrower. Here's a list of different factors that impact your credit score and their approximate percent of impact.
Types of Credit in Use:10%--Considers the number of credit accounts and the mix of credit types: credit cards, installment loans, mortgages, and is most important if you don't have a very lengthy credit history.
Payment History: 35%--Takes into account (1) many different types of payments, including mortgages, major credit cards, department store credit cards, car loans, other installment loans such as for furniture, etc., (2) information from public records such as bankruptcies, liens, lawsuits, foreclosures, judgments, and wage garnishments, (3) details of any missed or late payments, such as the amount, how long ago it occurred, and how late it was.Amounts
Owed: 30%--Looks at (1) the total of all the amounts you owe for all accounts, (2) the mix of amounts owed (credit cards versus installment loans, for example), (3) the number of accounts that have balances, (4) how much of your total credit available on credit cards and installment loans you're using (the closer you are to maxing out your available credit, the more negative the impact on your score), and (5) how much of the original balance borrowed you still owe on installment loans, like your car loan.
New Credit: 10%--Considers (1) how many new credit accounts you've opened recently, (2) how long it's been since you opened a new credit account, (3) how many requests you've made for credit recently, (4) how long it has been since lenders have requested credit information on you, and (5) how good your recent credit history has been.
Types of Credit in Use:10%--Considers the number of credit accounts and the mix of credit types: credit cards, installment loans, mortgages, and is most important if you don't have a very lengthy credit history.
Payment History: 35%--Takes into account (1) many different types of payments, including mortgages, major credit cards, department store credit cards, car loans, other installment loans such as for furniture, etc., (2) information from public records such as bankruptcies, liens, lawsuits, foreclosures, judgments, and wage garnishments, (3) details of any missed or late payments, such as the amount, how long ago it occurred, and how late it was.Amounts
Owed: 30%--Looks at (1) the total of all the amounts you owe for all accounts, (2) the mix of amounts owed (credit cards versus installment loans, for example), (3) the number of accounts that have balances, (4) how much of your total credit available on credit cards and installment loans you're using (the closer you are to maxing out your available credit, the more negative the impact on your score), and (5) how much of the original balance borrowed you still owe on installment loans, like your car loan.
Length of Credit History:
Credit History15%--As long as you don't have negative information in your file, the longer your credit history, the higher your score.New Credit: 10%--Considers (1) how many new credit accounts you've opened recently, (2) how long it's been since you opened a new credit account, (3) how many requests you've made for credit recently, (4) how long it has been since lenders have requested credit information on you, and (5) how good your recent credit history has been.
Thursday, August 28, 2008
4 factors for a mortgage
This article was posted on bankrate.com and provides a great mnemonic called the “Four C’s”
If you are okay according to the four C’s you should be able to get a mortgage. You might also be able to obtain a mortgage if one of these C's is a little weaker then the other one. For example, you have a ton of equity (>35%) and have a lower credit score. You will be able to get a loan or vice versa, you have little equity, but a terrific credit score. The truth is that there are tons of products on the market for consumers. Don’t be too concerned about not getting a loan if you live within your means and have a good credit score.
If you have any questions regarding your current mortgage, please contact us @ http://www.thesatorigroup.org/.
If you meet all of the four C's you might be a perfect fit for our SWBStm.
http://www.bankrate.com/brm/news/mtg/20080710-mortgage-requirements-a1.asp
The four C's
Capacity, which refers to the adequacy of the borrower's income to pay the interest and principal due on the loan, plus property taxes and homeowners insurance.
Character, which refers to the borrower's track record of paying debts as evidenced by his or her credit history and credit score.
Capital, which refers to the borrower's down payment (or equity) as a percentage of the current value of the home.
Collateral, which refers to the safety and soundness of the home and the value of the home as determined by an appraisal relative to the agreed-upon purchase price.- Greg Gwizdz, national
sales manager for Wells Fargo Home Mortgage in Des Moines, Iowa. 7/10/2008
If you are okay according to the four C’s you should be able to get a mortgage. You might also be able to obtain a mortgage if one of these C's is a little weaker then the other one. For example, you have a ton of equity (>35%) and have a lower credit score. You will be able to get a loan or vice versa, you have little equity, but a terrific credit score. The truth is that there are tons of products on the market for consumers. Don’t be too concerned about not getting a loan if you live within your means and have a good credit score.
If you have any questions regarding your current mortgage, please contact us @ http://www.thesatorigroup.org/.
If you meet all of the four C's you might be a perfect fit for our SWBStm.
http://www.bankrate.com/brm/news/mtg/20080710-mortgage-requirements-a1.asp
Subscribe to:
Comments (Atom)