Spring is a great time to renew, reevaluate and start anew!  Clutter and things on your to-do list can stifle creativity and progress.  What a better time than now to look at those things and start getting them done!  Why not make it a ritual that each spring you take a renewed look at your finances!

Do you spend the time, at least once per year, to really take a look at your finances and evaluate where the money is going?  Do you create a household budget? Do you know how much you spend on eating out each month?  Do you know how many years until your student loans are paid off?  Do you get a monthly or yearly statement from your life insurance company?  The answers may shock you.  We often go through the years not really knowing where we are with our finances or how long it will actually take us to pay off that spontaneous purchase or even the car or credit card.

One of the things on my “to-do” list that I have been putting off is getting all of our bills onto our bank’s online bill pay process.  Doing this will save me a couple of hours a week going through our mail, paying bills and filing, but for YEARS I have had this one thing on my “to-do” list and for YEARS I have failed to make it happen! Finally, we decided to change our bank accounts from one bank to the other and I finally took the time to set up our automatic bill pay.  Now, this is a work in progress, BUT it took LESS time to set up than I thought and will ultimately SAVE me a LOT of time each week. 

We have been spending a large amount of time coaching our clients on a new loan product called the Home Ownership Accelerator ®.  One of the things that has become apparent through this process is the power of money over time because any money in the Home Ownership Accelerator ® account decreases the principle you owe on your home loan, ultimately saving you thousands of interest on your mortgage.  This product really is a revolutionary way to be the BANK of YOU!

Whether you are a current client or just someone interested in taking a larger look at your finances, your mortgage and your goals, give us a call for a yearly mortgage review.  We would be delighted to help you renew, reevaluate, and start anew with your finances and your mortgage!

Also, visit http://www.homeownershipaccelerator.net/ and watch the 5 minute HOA movie.  If you visit this site and report back that you watched it, we will send you a FREE t-shirt!

By David Vindiola

MVM Mortgage Group is excited to introduce a revolutionary product called the Home Ownership Accelerator that could dramatically improve the speed and lower the cost of paying off your mortgage. It does this by replacing your mortgage and your checking account with one new combined loan/checking account that puts the cash that you usually flow through your current checking account to better use.

How does it accelerate the pay-off of my mortgage?

 If you are like most people, you flow most of your cash through your checking account to pay for your monthly expenses. While this cash sits in your account waiting to be spent, it earns 1% or less in interest. Your bank takes that money and lends it out to other folks at 6% or more, giving them 4%+ profit on your cash. By combining a checking account with a mortgage, you take the bank out of the equation and keep that 4% profit. How? You “lend” your cash to yourself, parking it against your mortgage balance until you need it to pay your bills. This reduces your mortgage balance, saving you interest charges. So, your cash “saves” you 5-6% in mortgage interest, rather than earning 0-1% in a standard checking account.

 If I flow my income through my mortgage, how do I pay my bills?

 The Home Ownership Accelerator is actually a big home equity line of credit with immediate access to your equity. The loan allows you to directly deposit your income into the account, which immediately reduces your mortgage balance by that amount. Then, you use ATM/debit card, checks, bill-pay or automatic debits to pay your bills, just as you do today with your traditional checking account. These withdrawals are simply added back to your mortgage balance.

 How does putting my paycheck against my home loan balance save me interest charges?

 Mortgage interest is calculated by multiplying your loan balance by your interest rate. With this loan, we calculate your interest charges daily and add them to your mortgage balance at the end of the month. Each paycheck deposited immediately impacts how much interest you have to pay because it reduces your loan balance until you pay your bills. If you pay your bills at the end of the month, you could save up to 30 days of interest charges on the amount of your paycheck.

You actually save interest in two ways. First, the money you don’t need for expenses saves you interest by keeping your mortgage balance lower. Second, the money you do need for expenses saves you interest while it is waiting in around in the Accelerator account to be spent.

 What do I need to change to make this loan work?

 One thing you DON’T need to change is your spending habits. If you have positive cash flow now, your current family budget could allow you to almost double the rate at which you pay down this mortgage versus a traditional mortgage.

You will have to change how you view your mortgage. Some key differences are:

• Your paycheck and other deposits are all mortgage payments. You do not write a separate check to “pay the mortgage” every month, unless you max out your credit line.
• The interest you owe is paid automatically, added to your balance on the due date. You do not write a check to pay interest charges either, unless you max out your credit line.
• Your spare cash is in your home instead of in a checking account. Your cash is, in effect, converted to home equity until you need it, saving you interest until it is spent.

 What’s the catch?

 There is no catch, however there are some differences between the Home Ownership Accelerator and the loan you may currently have:

This loan is not a fixed-rate loan. It is a home equity line of credit (HELOC) with an adjustable interest rate. The interest rate is tied to the 1-month LIBOR financial index.

This loan has a range of margins available, (the fixed portion of an adjustable interest rate that provides the lender its profit) and the lowest possible margin will cost a fee to obtain

The loan has a small annual fee of $60 to cover operational expenses just like other HELOCs.  However, the benefit of saving 5-6% on the cash you park in your Accelerator account should far outweigh the additional expense of obtaining a low margin and the annual fee.

 How do I know if this loan is right for me?

 You won’t until you discuss your specific situation with our certified Home Ownership Accelerator professionals and run your scenario through our Accelerator loan simulator. However, refinancing into this product, or buying a new property with it, could result in tremendous financial benefits. If you haven’t already talked to us about this exciting new loan program, call to set up a time to discuss it in more detail.  The results we are seeing with many clients are very exciting to say the least.