Five Ways To Lower Your Mortgage Payment

There are two kinds of homebuyers: those for whom the sales price is the main consideration, and those who are mostly concerned with what it will cost them per month. If you've already bought a house, there isn't anything you can do about the sales price. But there may be ways to lower what you shell out monthly.
Want to lower your mortgage payment? Here are a few ways to do it.
Get Rid Of Your Private Mortgage Insurance (PMI)


"PMI is the lender's (bank's) protection in the event that you default on your primary mortgage and no longer make payments and the home ends up going into foreclosure," said Investopedia. "If the borrower is unable to put down 20 percent or more, or does not have the required funds to do so, then lenders will typically look at the loan as a riskier investment for their balance sheet and will require a PMI payment from the borrower."
That means you end up paying a premium above and beyond your principal, interest, and homeowner's insurance—currently about 1.35 percent. On a $200,000 loan, we're talking about $2,350 a year. Remove your PMI, and that's $195 a month in your pocket.
If house prices have been rising in your area, you've been in your home for at least two years, and you think your equity in your home has increased, talk to your lender.
Lower Your PMI
If you can't yet get rid of your PMI, you may be able to lower it.
In January 2015, the government announced lower PMI rates for buyers taking out Federal Housing Administration (FHA) loans.
"This change is expected to save more than two million FHA homeowners about $900 a year and allow about 250,000 consumers to buy their first homes in the next three years, according to a news release from the U.S. Department of Housing and Urban Development," said Credit.com. "Hundreds of dollars in savings makes a big difference in the finances for first-time homebuyers who couldn't afford to make a 20 percent down payment."
New homebuyers can take advantage of the lowered PMI; existing homeowners who want to lower their PMI will need to refinance.
Refinancing
Lowering your PMI is far from the only advantage of refinancing. Taking advantage of low rates means you could save substantial dollars on your mortgage payment.
"Depending on loan size, a rate reduction of as little as a half point can save some real money," said Fox Business.
If you are currently paying on a 15-year mortgage, switching to a 30-year loan can save you hundreds of dollars monthly. Check out this comparison calculator to see your particular scenario.
If you're in an area that is declining and can't refinance by traditional means, check out a HARP refinance. "The Home Affordable Refinance Program (HARP) through the U.S government may be the answer to your financial woes.
According to the HARP fact sheet, if you don't qualify for a conventional refinance, a program through HARP may help lower your mortgage payments through refinancing to a lower rate or a more stable mortgage product," they said
Check out the HARP website for qualification information.
Buy Down Your Rate

If you're just buying a home, your lender may have already talked to you about buying down your rate. If you can swing it, a little more money upfront for a lower interest rate can save you money. Sometimes, your lender might also be able to help you buy down you rate.
"You can typically purchase one discount point for one percent of the cost of your mortgage, with most lenders limiting you to the purchase of three points," according to U.S. Mortgage Calculator. "Each point will reduce your rate by 0.125 to 0.25 percent, for the life of your loan. That can mean some serious savings and a modest reduction in your monthly payment."
Monthly principal and interest on a $300,000 mortgage at a 4.27 percent conventional rate is $1479.34. Buying down the rate by one point to 4.02 percent lowers the payment to and the payment to $1435.70.
Get a Tenant
Have an extra room, preferably one in a private location with its own entry? Take on a roommate or a border and collect some rent.
According to US News, renting is an effective way to solve a cash flow problem. "When people can't afford to buy homes, they rent. More demand means you can get more for your spare room," they said.


Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

Is now the time to refinance your mortgage?

Interest rates on home loans are historically low. That means now is the time to dig out your mortgage loan paperwork and consider whether refinancing is right for you.
Five years ago, the government started injecting trillions of dollars into the U.S. economy. Conventional wisdom suggested that rising interest rates were soon to follow. Some even predicted the collapse of the dollar and hyper-inflation. Instead, inflation is down, the dollar is the strongest it's been in 10 years, and interest rates have fallen to the lowest levels in decades.

When refinancing, you take out a new, lower-interest loan to pay off the old one. Here's how to find out whether it's a good option:
First, check the current interest rate on your mortgage loan. Let's assume you have a balance of $200,000, with monthly principal and interest payments of $1,013 at a rate of 4.5%.
Next, shop around. Call two or three mortgage brokers and find out the interest rate you can obtain on a new loan. They'll ask for your household income, the value of your house and the current balance on your mortgage. If you don't know how much your home is worth, contact your local property tax office for an assessed value.
Ask the brokers to give you the interest rate and payments on a mortgage similar to the number of years left on your current loan. Also ask about a shorter-term loan, which usually has a lower interest rate.
When shopping for a new mortgage, you may be tempted to reduce your payments even more by lengthening the term of your new loan. While the benefit is more spending money per month, you can end up paying more in interest. I strongly suggest obtaining a new mortgage that is equal to or less than the number of years remaining on your current loan.
Then, get an estimate of all other costs, including title insurance, an appraisal and a closing fee. Lenders sometimes charge "points," or origination fees, which are also part of your closing costs. One point equals 1% of the loan's value. Mortgages described as "no-cost" or "zero points" do not carry this cost, but the interest rate may be higher.
Now, calculate how long it will take to recover your refinancing costs. Getting a new loan makes financial sense if you are able to break even soon.
Let's assume you find out you can obtain a new loan with a similar term at 3.65%. The monthly payments are $915, and the closing costs are $1,900. The new payment is $98 less than your current $1,013. Divide the $1,900 closing cost by the $98 monthly savings. The answer, 19, is your break-even point, the number of months you need to keep the house to recoup the costs.
If your break-even point is 24 months or more, or if you intend to sell your home in the next two years, refinancing may not make sense. No one knows what curves life may toss us, and looking two years ahead is my comfort level.
Remember that a lower rate doesn't automatically mean refinancing is in your best interest. How much you save monthly, your closing costs and how long you plan to live in your home are key variables in determining whether you should refinance your mortgage.

Mortgage lenders are getting creative to keep rates low, but here’s why homebuyers should beware

Online comparison shopping is changing everything from how we buy a new television set to how we select a mortgage, and it’s causing some mortgage lenders to get creative in order to compete.
“Lenders are stripping away features of mortgages to get their rates lower,” says Steve Pipkey, co-founder of Spin Mortgage.
Consumers have always been keen on scoring a low mortgage rate, but the ease with which they can comparison shop via their computers, smartphones and tablets has created an even greater fixation on the headline number, above all else.

“The majority of our phone calls are about rates these days, whereas before it might have been more about, ’How can I get my money out fast?’ or ’What’s the quickest way to refinance my home?”’ says Bob Aggarwal, president of Canadalend.com.
Brokers say the push for low rates is not a bad thing, but it has led to some confusion. While mortgage contracts used to be fairly standardized, many of them now contain various conditions and clauses, and in some cases it’s hard for consumers to decipher the difference between various products.
“If you’re online trying to figure out what the rates are and why, good luck to you,” says Pipkey. “Some banks and brokers are better at disclosing the fine print than others.”
In some instances, in exchange for a lower rate, lenders are adding steeper penalties for paying off a mortgage early. By chasing those five extra basis points, buyers put themselves at risk of having to pay thousands more in penalties later on down the road, says Pipkey.
Prepayment privileges also allow borrowers to pay more than their regular mortgage payments without penalty in order to get out of debt faster. But some lenders may reduce how much money borrowers can repay in exchange for a rate reduction.
Pipkey says it’s not surprising that lenders are lowering their rates given how competitive the mortgage market has become.
“Mortgage originations are down and lenders are fighting for market share in the face of compressing margins,” he said.
Bill Whyte, senior vice-president and chief of member services at Meridian Credit Union, says it’s hard to attract clients unless you offer a competitive rate that will grab the attention of borrowers.
The credit union recently offered, for a limited time, an 18-month mortgage for an eye-grabbing 1.49 per cent.
“To our knowledge, when we offered it, 1.49 was the lowest in Canadian history,” said Whyte.
“It drove a ton of traffic to our contact centre, our website and our branches.”
However, many borrowers who phoned to discuss the offer ended up going for a five-year mortgage at a slightly higher rate instead, he said.
“In a lot of cases the five-year rate fit them better, and some of that initial interest in 18-month was diverted to five-year,” he said, adding that many Canadian borrowers are looking to lock in at today’s rock-bottom interest rates before they climb higher.


Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

Debt: Paying off debt

The basics of debt reduction are simple: Cut down on your variable spending and put the extra money toward your debt payments. But outside of fixed monthly bills such as housing or car payments, you probably don't have a precise idea of how you spend most of your money.

1. Figure out where your money goes. If you want to get your debt under control, start by figuring out your spending patterns and identifying unnecessary expenses. For one month, write down every cent you spend, including that $2 cup of coffee or a $4 magazine. That will clarify how much of your spending is fixed and how much is variable (and hence easier to curb).

2. Cut out the extras. Tally the expenses on the list and compare the sum to your monthly income. If it's less than what you earn, use the extra money as your debt payment. If it exceeds your income, you need to cut back on the variables.
3. Lower your fixed expenses. Reining in discretionary spending for a few months goes a long way toward tackling debt. But if that's not enough, try to reduce your fixed expenses. Take steps to lower your household bills; refinance your mortgage to get a lower interest rate; or, if you have a good payment history, ask your credit card company to lower the interest rate you're charged.
4. Try to boost your income. Consider whether there's any way to boost your take-home pay. If you get a big tax refund every year, that means you're having too much withheld from your paycheck. If that's the case, you can reduce your withholding by changing your W-4 at work.
5. Make a list of your debt. Next, make a list of all your debt obligations and the interest you're charged for each. Put them in order of interest rate, from highest to lowest.
6. Transfer high-interest balances. You might consider moving some of your high-interest credit-card balances to a card with a lower interest rate. But read the fine print on any invitation to transfer balances. Sometimes such low-interest-rate offers are only in effect for short periods of time, after which the rate skyrockets. What's more, consolidating your debt on one card may lower your credit score if your debt-to-available-credit ratio worsens.
7. Pay off the highest rate first. Once you determine the maximum amount you can pay off each month, pay down the debt with the highest interest rate first -- that usually means your credit-card balance -- while paying at least the minimum monthly amount due on all other revolving bills.
8. Move down the list. Once the debt with the highest rate is wiped out, put your money toward paying the debt with the next-highest rate. One exception: If you have a credit card with a low teaser rate that will go up after a fixed amount of time, strive to eliminate that balance before the low rate expires.

Ways to Lower Your Mortgage Payment

Talk of lower mortgage payments is usually associated with helping struggling homeowners get out of bad home loans or avoid foreclosure. While government-sponsored mortgage assistance programs are available to help you secure a lower mortgage payment, you can exercise other options that utilize the same, or similar, tactics.

Get a Lower Interest Rate

A lower interest rate usually results in a lower mortgage payment. According to the Fair Issac Corporation, a $500,000 fixed-rate 30-year loan with an interest rate of 5.625 percent results in a monthly payment of $2,878. Lower the rate to 4.036 percent, and you'll pay $2,397 each month. If you are current on your mortgage but want to take advantage of lower rates, you can contact your lender about a mortgage refinance. Refinancing allows homeowners to take out a new loan, with more favorable terms, for the principal balance on their current loan. If your credit is sound and you have considerable equity in your home, you might be able to take out a larger refinanced loan and use the excess cash for other purposes. If you are struggling to make your mortgage payment, you might be able to get a lower interest rate through the Home Affordable Modification Program. Through HAMP, the lender looks to bring your monthly mortgage payment down to no more than 31 percent of your monthly gross income. Lenders first attempt to reach this threshold by reducing the interest rate to as low as 2 percent.

Extend the Loan Term

If a 2 percent interest rate does not produce a monthly payment equal to or less than 31 percent of your income, the lender might extend the loan term under HAMP. You can seek this option, outside of a government-sponsored hardship program, even if you are not experiencing financial hardship. While many financial experts, such as radio host Dave Ramsey, advocate shorter mortgages so you can be debt-free faster, a longer loan results in a lower payment. As Ramsey points out, the payment on a 15-year fixed-rate $225,000 mortgage with 6 percent interest is $1,899, while a 30-year note on the same mortgage produces a payment of $1,349.

Ask For Forgiveness

If your economic situation is dire, the lender might consider forgiving, or at least deferring, a portion of your loan's principal balance. HAMP, for instance, offers this option, according to the Making Home Affordable website. If the lender forgives a portion of your loan, the amount of your mortgage is reduced. As a result, you'll likely see a lower monthly payment. While a deferral can result in a lower payment, the lender will usually expect you to pay this money back when your financial situation improves. This can be in the form of additional monthly payments or in a lump sum at the end of the loan term.


Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

HARP 2.0 Can Lower Your Mortgage Payments

The housing market financially harmed many home buyers several years ago, and unfortunately what buyers paid for a house then is likely less valuable in today's market. If you find yourself trying to refinance and you can't get a loan due to your home's value being less than what you owe on the mortgage, the Home Affordable Refinance Program (HARP) was created for people who have found themselves dealing with this particular issue.

How You Can Qualify for HARP

Requirement	Description
1. Must be Freddie Mac or Fannie Mae loan	Both Freddie Mac and Fannie Mae have an online tool that lets you look up your current loan information to determine if your loan qualifies.
2. Must be first refinance with HARP	The only exception to the rule is if you refinanced prior to May 31, 2009 using Fannie Mae.
3. Must have LTV Ratio over 80%	You can only sign up for a HARP loan if you owe more than 80% of what the home is worth. This percentage is the loan-to-value ratio (LTV).
4. Must have qualified Credit Score	You must have a credit score that is good enough to qualify for a typical mortgage. In most cases, a credit score of 680 and higher should be sufficient enough to qualify you.
5. Must be current on payments	You must have a good payment history for the last 12 months. The most important factor is that you haven't been more than 30 days late on your mortgage within the previous year.

Getting Started

1. Obtain your latest credit scores
Some websites like annualcreditreport.com offer a free credit score each year. You are legally allowed one free credit report every year by each of the three credit bureaus. Determine your eligibility and save yourself time by running your report before you talk to lenders. Each lender requires different credit scores, but if your middle score is at least 680, you can usually lower your interest rate.
2. Gather all of the information that will be required
Refer to our "Mortgage Application Checklist" article to see what information lenders will need to complete your application, and out " What Documents Are Required for a Home Loan?" article to see what documentation you should gather as well. Preparing ahead of time ensures that your mortgage approval process will be quick, with significantly fewer delays.
3. Call your current mortgage company
See what rate and terms would be available to you for a HARP refinance through your current lender. Keep in mind that your lender may not have the best rates available.
4. Shop around with three lenders before you choose one
Refer to our "How to Choose a Mortgage Lender" article for some in depth insight to help with your search. Finding a lender who is offering you an interest rate that is a fraction of a percent lower than the others and who charges you less in fees can substantially reduce your monthly payments further that what you would already be saving through the HARP program.

HARP is here to Help

If you find yourself paying too much for your mortgage, or you received a high interest rate on your loan and have a loan-to-value ratio (LTV) that is more than 80%, HARP can you greatly reduce your payments and leave you more satisfied with your loan. HARP is a wonderful option for people who are paying too much for loans they received several years ago when the housing market couldn't offer the advantages that they have now.
Take note, that the HARP program is only available for a limited time. Unless directed by the FHFA, Fannie Mae and Freddie Mac to further extend the HARP program, it is set to expire on December 31^st, 2015. There have been no announcements on whether or not there will be an extension to date, so it is important that you take advantage of this opportunity and refinance before the deadline.


Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

6 Ways to Lower Your Mortgage Bill

Before moving into a cheaper house, there are some things you can do to cut that big mortgage obligation. Most mortgage payments are made up of four parts: principle, interest, taxes and (homeowners) insurance. Lowering any one or more of these of components is worth considering.
Refinance at a Lower Interest Rate
Sometimes it's better to refinance your loan at a lower rate -- even if your monthly payment is higher -- in order to cut the amount of money you will ultimately pay the bank.
You can also restructure the loan from a 30-year to a 15-year. Your monthly payment will be higher, but you'll cut the total number of years of making payments.
"This will save money in the long run," said Holden Lewis, senior mortgage analyst at Bankrate.com in Palm Beach Gardens, Florida.

Shop Around for Homeowners Insurance
"It's a good idea to periodically shop around for a lower premium," Lewis said.
He also mentioned making some improvements to your home that could make you eligible for a discount. For example, homes in hurricane-prone areas can be reinforced with special hurricane-resistant glass and roof reinforcements to better protect the home and qualify for a lower quote.
Grieve Your Tax Bill
You can do it yourself or hire a company to petition your town for a lower tax assessment.
Make an Extra Mortgage Payment Each Year
According to Lewis, if you take one-twelfth of the principle and interest portion and add that to each monthly payment, you'll be making an extra payment every year which will help reduce the total number of years of the mortgage.
Recast Your Mortgage 
Rich Zito, co-founder of Flynn Zito Capital Management in Garden City, New York says "If you like your bank, you can ask to recast your loan at a lower rate." He said it depends on the bank and other factors, but it's worth looking into.
Eliminate PMI Insurance 
If your original down payment was less than 20%, you've probably paid PMI insurance. "But if you have more than 20% equity in the home, you no longer need PMI insurance, and you can petition the bank to eliminate it," Zito said.



Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

How your credit score affects your mortgage rate

The most influential determinant of your mortgage rate is your credit score. The higher your credit score, the lower the interest rate.

One percentage point makes a big difference Monthly principal and interest payments on a 30-year fixed-rate mortgage for $200,000
Interest rate	Monthly principal and interest
4%	$954.83
5%	$1,073.64

Not only is a high credit score vital in getting a low mortgage rate, it influences whether you can get a home loan at all. Buyers below a certain threshold, typically a FICO score of 620, have a better chance of striking oil in their bathtub than securing a mortgage. It's possible, but it will require some digging.
A credit score of 740 or more should qualify for the best mortgage rates from most lenders. Depending on the lender, the mortgage rates offered to the highest and lowest credit tiers can vary as much as a full percentage point and a half, says Louis Spagnuolo, a former vice president of mortgage banking at WCS Lending in Boca Raton, Florida.
Good credit can save you thousands on your mortgage.

What lenders look for

Lenders prefer borrowers with low balances, a long history of on-time payments and a mix of credit utilization -- for instance, a car loan and a couple of revolving accounts such as credit cards.
"Lenders look at several variables on the credit report: outstanding debt; the outstanding debt relative to the total available debt; the length of the credit history; and the pursuit of new credit -- how many inquiries are on your report," says Matt Hackett, underwriting manager at Equity Now, a direct mortgage lender in New York.

How to clean up your credit

Ideally, you'll check your credit report a year or so before buying a home. That gives you time to correct errors in the report and change ways you use credit to improve your score.
Get credit reports from Equifax, Experian and TransUnion. Make sure you get reports from all three. The information they contain can vary. Scour everything from the way your name is spelled and previous addresses to checking that each and every account is yours and reported correctly. If an account has been closed, make sure that is accurately reported.
"Sometimes people will quickly glance over their information and that's it. But you should take the time and look at the account numbers," says Steve Katz, senior marketing communications executive for TransUnion.

Correct and wait

All three credit bureaus make it easy to dispute errors online.
If everything is correct, pay down balances and let time do the rest.
The credit reporting agencies do charge a fee if you want to know your credit score. Lenders look at all three scores and use the middle one, Hackett says.

What else you can do

If you're buying a home soon, try not to apply for new credit. Though it's not always avoidable -- for instance, if you need a car loan or college financing -- you should resist opening several new lines of credit in a short time. Multiple new accounts can decrease your credit score.

Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance
 

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

Minimise your mortgage burden

Does mortgage stress keep you up at night? There are several ways you can lessen the burden.

Recent Domain research showed that Australian homeowners find mortgage repayments one of the most stressful aspects of owning their own home, as well as rising energy bills, insurance costs and council rates.
Well, it has been said that ‘the best cure for stress is action’, and it’s good advice. Here are a few steps you can take to reduce your mortgage – and your stress as a homeowner.

Find a better mortgage

It can help if you think of your mortgage as a possession or chattel – that it’s an item like a TV. If you’re unhappy with your interest rate or anything else about your mortgage, you can shop around and change it. Just beware of mortgage exit fees that may make a change unfeasible.
Australia’s mortgage interest rates are very low right now – with the average rate sitting at around 5 per cent – so it makes sense to at least check whether refinancing your mortgage is worthwhile. Find yourself a good mortgage broker and get them to explain their commission and fee structures before you sit down to talk strategy with them.

Get a home loan health check

Many financial services companies offer a home loan ‘health check’ service. And if you’ve got a spare minute, Fairfax has a free online home loan health check tool you can use right now.

Open a mortgage offset account

Another option to discuss with your financial adviser is the viability of switching your mortgage to an offset account. As always, it is important to be informed, so you should seek help from a trusted financial adviser to ensure you understand all the fees and costs involved.

Take advantage of mortgage tax breaks

Whether you’re a homeowner or a property investor, your mortgage can provide effective and legitimate tax deductions that will greatly ease the pain at tax time.
Negative gearing is currently a hot topic among Australia’s finance media, but if you’re a property investor, the best advice is to look carefully at using negative gearing to gain a foothold in the market by buying investment properties and continuing to live at home or rent with a group of people.

How to Lower a Mortgage Interest Rate Without Refinancing

If you do not want to refinance your mortgage, a loan modification might reduce your interest rate. However, for your lender to approve your modification, you will have to prove you are suffering financial hardship. Alternatively, you can tell your lender you are considering refinancing, preferably with another lender, and ask if they could lower your interest rate. Your lender might reduce your interest rate to keep your loan. However, this depends entirely on your lender. If you are struggling to pay your mortgage, a loan modification has a better chance of success.

1.Contact an approved housing counselor, and ask what choices you have. Housing counselors approved by the Department of Housing and Urban Development offer free advice on how to reduce your mortgage costs. They can even help you negotiate with your lender.

2.Call your lender and ask to speak to the loss mitigation department. This is the department that has the power to reduce a mortgage's interest rate. Explain you are going through a financial hardship and need a loan modification that reduces your mortgage's interest rate. Your lender will ask for documentation that proves your financial hardship and your ability to pay the modified loan.

3.Provide your lender with the necessary documentation. This will include bank statements, a hardship letter explaining why you are struggling with your mortgage and a family budget detailing your income and monthly expenses. Fill in and sign the forms, and send them back to your lender. If the loan modification is approved, your interest rate will drop.

Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

 

Five Ways To Lower Your Mortgage Payment

There are two kinds of homebuyers: those for whom the sales price is the main consideration, and those who are mostly concerned with what it will cost them per month. If you've already bought a house, there isn't anything you can do about the sales price. But there may be ways to lower what you shell out monthly.
Want to lower your mortgage payment? Here are a few ways to do it.

Get Rid Of Your Private Mortgage Insurance (PMI)
"PMI is the lender's (bank's) protection in the event that you default on your primary mortgage and no longer make payments and the home ends up going into foreclosure," said Investopedia. "If the borrower is unable to put down 20 percent or more, or does not have the required funds to do so, then lenders will typically look at the loan as a riskier investment for their balance sheet and will require a PMI payment from the borrower."
That means you end up paying a premium above and beyond your principal, interest, and homeowner's insurance—currently about 1.35 percent. On a $200,000 loan, we're talking about $2,350 a year. Remove your PMI, and that's $195 a month in your pocket.
If house prices have been rising in your area, you've been in your home for at least two years, and you think your equity in your home has increased, talk to your lender.
Lower Your PMI
If you can't yet get rid of your PMI, you may be able to lower it.
In January 2015, the government announced lower PMI rates for buyers taking out Federal Housing Administration (FHA) loans.
"This change is expected to save more than two million FHA homeowners about $900 a year and allow about 250,000 consumers to buy their first homes in the next three years, according to a news release from the U.S. Department of Housing and Urban Development," said Credit.com. "Hundreds of dollars in savings makes a big difference in the finances for first-time homebuyers who couldn't afford to make a 20 percent down payment."
New homebuyers can take advantage of the lowered PMI; existing homeowners who want to lower their PMI will need to refinance.
Refinancing
Lowering your PMI is far from the only advantage of refinancing. Taking advantage of low rates means you could save substantial dollars on your mortgage payment.
"Depending on loan size, a rate reduction of as little as a half point can save some real money," said Fox Business.
If you are currently paying on a 15-year mortgage, switching to a 30-year loan can save you hundreds of dollars monthly. Check out this comparison calculator to see your particular scenario.
If you're in an area that is declining and can't refinance by traditional means, check out a HARP refinance. "The Home Affordable Refinance Program (HARP) through the U.S government may be the answer to your financial woes.
According to the HARP fact sheet, if you don't qualify for a conventional refinance, a program through HARP may help lower your mortgage payments through refinancing to a lower rate or a more stable mortgage product," they said
Check out the HARP website for qualification information.
Buy Down Your Rate
If you're just buying a home, your lender may have already talked to you about buying down your rate. If you can swing it, a little more money upfront for a lower interest rate can save you money. Sometimes, your lender might also be able to help you buy down you rate.
"You can typically purchase one discount point for one percent of the cost of your mortgage, with most lenders limiting you to the purchase of three points," according to U.S. Mortgage Calculator. "Each point will reduce your rate by 0.125 to 0.25 percent, for the life of your loan. That can mean some serious savings and a modest reduction in your monthly payment."
Monthly principal and interest on a $300,000 mortgage at a 4.27 percent conventional rate is $1479.34. Buying down the rate by one point to 4.02 percent lowers the payment to and the payment to $1435.70.
Get a Tenant
Have an extra room, preferably one in a private location with its own entry? Take on a roommate or a border and collect some rent.
According to US News, renting is an effective way to solve a cash flow problem. "When people can't afford to buy homes, they rent. More demand means you can get more for your spare room," they said.


Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

How to Save Money on your Mortgage

Interest on the average home mortgage will cost the homeowner nearly TWO TIMES the cost of the home.
If you were to purchase a $150,000 home with a $120,000 mortgage (80%), and you paid an interest rate of 9% for 30 years, you will have paid over $227,500 just in interest (in addition to the original $120,000). That's nearly two times the cost of the home!

A credit card debt of $7000 (now the average) at 18% being paid at the rate of $20 principal plus interest each month will take over 29 YEARS to pay off, almost as long as a home mortgage. Interest charged on this credit card debt will top $18,400, more than 2.6 TIMES the original debt!
If you work for a living, you know that when you are not working, you are not getting paid. But interest never gets sick, never takes a vacation and never sleeps. It is working against you 24 hours a day, seven days a week, each and every day of the year.
So what can you do?
You may not be able to pay off your debts or mortgage now. You may not have enough equity in your home for a loan. You may not be able to afford the refinancing costs or home equity loan costs. You may not be able to lower your credit card interest rates.
But you can make additional or extra payments.
So how does making an extra payment help lower your interest charges? Is it going to make next month's bill smaller? You can't scrape together too much for an extra payment so how is just $10 going to help when you owe tens of thousands?
The secret is in making early and consistent extra payments. For example, on the home mortgage shown above, if you pay an additional $100 each month you will save over $82,000 in interest payments. Not only that, but you will also have your home paid off nine years and two months earlier. You knock nearly 10 years off your mortgage just by paying an extra $100 a month.
How does that work?
Well, that $100 extra you pay the first month would have cost you about $270 in interest to borrow for 30 years. Since you have paid it already, you can reduce your last mortgage payment by $270. The next month's extra payment will reduce your last mortgage payment by $268. Each month as you pay that extra $100, your final mortgage payment will be reduced until you won't need to make a final payment, then the second to last payment, then third to last and so forth. Soon you will have shaved years and thousands of dollars in interest charges off your mortgage.
That's great, but maybe you can't spare $100 each month. How about $50, $25, or even $10? An additional payment of $50 each month will save you five years and seven months and about $52,000 dollars. $25 each month will cut your time by three years and three months saving you about $30,000. Just $10 a month will reduce your time by one year and three months and save you over $13,500.
Every little bit helps. Some months you may only be able to add $10 to your payment; some months you may be able to add $200. And this applies to interest on credit card payments or any other kind of debt repayment. Paying down as much of the principal (or amount you owe) each month will help reduce the interest you are charged and the length of time it takes to pay off the debt.
So why don't the credit card companies charge you more of the principal each month?
How would you like to be making 18% on an investment? Wouldn't you want this investment to last as long as possible? Of course! So do the credit card companies. They are happy for you to pay off your balance, but even more excited for you to keep paying them that 18% interest.
There are some other interest tips and tricks.

• One trick your mortgage company may have played on you is to include a prepayment penalty in your mortgage. If you try to pay off your mortgage early they may actually charge you for doing so. Or they may only apply part of your payment to the principal and take the rest as a "service charge."
• Make sure when you make an additional payment that you send a check separate from your monthly mortgage payment with instructions that the amount is to be applied toward the principal of your loan. Otherwise they may just apply it towards next month's payment and still charge you the interest.
• Generally you will not have this problem with credit card companies. But watch out for late payments or going over your credit limit. They may then use these "rule infractions" as cause to raise your rate to over 25%!
• If you are looking to refinance your mortgage, look for a mortgage that lets you pay on a bi-weekly basis. Since many people receive a bi-weekly paycheck this also makes it easier to budget your money. If you are paying every two weeks you will make an additional monthly payment each year (26 bi-weekly payments vs. 12 monthly payments). Also, because you are paying the principal down every two weeks rather than every month your interest charges will be reduced. 

Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

Nine Reasons to Love Your Mortgage

1. It's your cheapest way to borrow.
I'm not crazy about carrying debt. But if you need to borrow, a mortgage is the way to go. The interest incurred is typically tax-deductible and the rate should be low, in part because the loan is secured by your home. If you have other debt, you probably could lower your borrowing costs by paying off those loans and instead carrying a larger mortgage.

2. It's a negative bond.
Got a $200,000 mortgage and $200,000 in bonds? One is costing you interest while the other is earning you interest, so arguably your net bond position is zero. In fact, the rate on your mortgage is likely higher than the yield on your bonds, so it might make sense to sell bonds to pay down your mortgage.
3. It leverages your entire financial life.
We all engage in mental accounting, thinking of our home and mortgage in a different bucket from, say, our brokerage account. But once we have that mortgage, it effectively leverages our financial life, allowing control of more assets than if we didn't have the loan.
Suppose you own a $400,000 home with a $300,000 mortgage. Your only other significant asset is $200,000 in stocks. In effect, what you have is a $600,000 real estate-and-stock portfolio, half of which is bought with borrowed money.

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That leverage magnifies gains and exaggerates losses, in the same way you can magnify gains and losses in a brokerage account by buying on margin. But a mortgage is the safer way to borrow.
While a brokerage firm can force you to repay a margin loan if your investments plunge in value, your mortgage lender can't demand its money back if your home tumbles in price.
4. It's a backup source of emergency money.
If you've built up some home equity, consider setting up a home-equity line of credit. That way, if you suddenly get hit with large medical bills or house repairs, you can borrow against your home's value.
5. It makes inflation your friend.
Like other hard assets, real estate tends to hold its value when inflation picks up. Also got a mortgage? You could be doubly protected against inflation.
The payments on a fixed-rate mortgage stay the same even as inflation rises, which means you can repay the loan with dollars that are less valuable. Adjustable-rate mortgage borrowers don't benefit to the same degree, because their interest rate will likely rise with inflation, though there are typically caps on how much and how fast the rate on an ARM can climb.
6. It lets you profit from falling interest rates.
If you have a fixed-rate mortgage and rates rise, you can sit tight with your low-cost mortgage. But if rates fall, you can refinance at the lower rate. Indeed, with 30-year mortgages still available at less than 4½%, this remains a great time to refinance.
7. It's an effective way to build wealth.
Despite the recent property slump, many folks still say their home is the best investment they ever made. It isn't because homes have enjoyed great long-run price appreciation. Over the past 30 years, prices nationally are up 3.6% a year, as measured by the Freddie Mac House Price Index. That's barely ahead of the 2.8% inflation rate.
Instead, homes build wealth by forcing folks to save. With every monthly mortgage payment, you trim the loan's principal balance—and eventually you should own a valuable asset free and clear.
8. It's your default investment.
If you're worried about today's lofty stock valuations and lowly bond yields, you could always pay down your mortgage instead. Suppose your mortgage is costing you 5%. That's the effective pretax rate of return you earn by making extra-principal payments.
9. Paying it off can drastically reduce your cost of living.
Indeed, making that last mortgage payment is often the signal that retirement is finally affordable. Want to retire early? You might make extra-principal payments, with a view to getting your mortgage paid off ahead of schedule.

Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

Flexible Payment Options

Skip a Payment

Life brings unexpected events. And sometimes those things require a little extra cash. So we have some helpful mortgage payment options for when your finances are stretched:

Take a Break Option

If money gets tight, you can skip up to one month of mortgage payments per calendar year. Some restrictions apply, so ask for details. Not available on the BMO Smart Fixed Mortgage. Choose to skip:

• One monthly payment
• Up to two bi-weekly or semi-monthly payments
• Up to four weekly payments

Family Care Option

If you or your partner is on leave from work to care for a new baby or ailing family member, you can skip up to four months of mortgage payments per calendar year. Some restrictions apply, so ask for details. Not available on the BMO Smart Fixed Mortgage.
Skip up to four months of mortgage payments (principal and interest) once per year if you or your partner must leave your job to care for a new baby or a sick family member. Choose to skip one of the following:

• Four consecutive monthly payments
• Eight consecutive bi-weekly or semi-monthly payments
• Sixteen consecutive weekly payments

Keep in mind, any time you skip a mortgage payment, you continue to accrue interest. This means you'll end up paying more over time. You can pay back your skipped payments anytime without a prepayment charge. Some restrictions apply for both mortgage payment options, so ask us for details.

Mortgage Cash Account

• When you use your prepayment options, your principal prepayments go towards building a Mortgage Cash Account within your mortgage^†
• With the Mortgage Cash Account, you can re-borrow prepaid funds, in amounts starting from $2,500 subject to meeting certain eligibility criteria.
• The re-borrowed funds are added to your mortgage principal at your existing interest rate for the remainder of the term.

Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

How to pay off your mortgage early

Paying off your mortgage early is one of the best investments you can make.
You get rid of your biggest debt fast, you are no longer at the mercy of the see-saw property market and you can put the money you are no longer paying on the mortgage to good work.
Borrowing heavily makes sense in a world of high inflation, which we saw in the Seventies and Eighties, because inflation reduces the value of the debt.

But in a world of low inflation the debt stays pretty much as it is.
Inflation may have risen in recent years but it is currently relatively low historically speaking, especially using the Government's preferred Consumer Prices Index measure. Crucially, however, just having inflation is not the key to eroding your debt,  you also need wage inflation. This has been virtually non-existent since the recession hit and if you can't rely on large wage increases reducing your debt then paying it off asap is a wise move.

Why you should overpay

Say you have a £100,000 mortgage taken out over a 25-year period, with an interest rate of 6%. Overpaying by £100 a month could save you a healthy £26,892.54 and knock six years and four months off the life of your mortgage.
Interest rates are low at the moment. And that means many people on tracker or SVRs are paying low mortgage rates.
On the surface, the impact of the saving from overpaying is greatly reduced by comparison to when rates are high - but if you use the money that you are now saving by having a lower mortgage rate to add to overpayments you'll get the debt cleared even faster.
For example: our borrower above at 6% has monthly repayments of £644, if their mortgage rate falls to 3% their new monthly repayments are £474.
If they overpaid by £100 they would save £10,730.94 and knock 5 years and 11 months off their mortgage, but add the £170 they are getting from lower monthly payments and overpay £270 a month and they save £20,178.89, but most importantly clear their mortgage 11 years and 4 months early.

What to watch out for

Beware with some lenders there is a minimum amount you are allowed to overpay. If you pay in less than this, your money sits in the lender's coffers until the end of its financial year, which means you are giving it an interest-free loan.
If you pay more than the minimum, your interest bills will be recalculated from the following month.



Some firms offer flexible or 'offset' mortgages that recalculate your balance daily. The effect is to help you get rid of your loan even faster and people can take advantage of this by paying extra every month.
Many High Street lenders have given normal loans flexible features, although some set minimum or maximum amounts you can overpay.

Watch out for charges

If you are on a fixed or tracker rate deal, you may have to pay an early redemption penalty if you pay off your mortgage completely, or go beyond permitted overpayments. On some poor value mortgages. this can stretch for several years after the initial rate is over. Making repayments in this situation is unwise.
Neither should you repay some of your mortgage if you have heavy credit card debts on regular (and high) APRs - mortgage loans are still the cheapest around.
It doesn't make sense to repay a mortgage at 6% if you have credit card debts where you could be paying 15%-20%.

And finally...

If you really want to achieve a mortgage-free life, you need to be disciplined. To put down lump sums on your mortgage, you will obviously need to some how free up money elsewhere and be a money master.
Fortunately, This is Money has everything you need to help you make more money and spend less...

Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

How to Reduce your Mortgage Faster

Always pay Principal and Interest

Firstly, it is important to understand how your home loan works. Your minimum monthly loan repayment is calculated on how much per month is needed to pay off the balance of the loan or principal over the term of the loan, plus the interest that has been accrued on that balance. This is called ‘Principal and Interest’ and should be the minimum you pay off your loan for your place of residence each month. If you have an ‘Interest Only’ loan you are only repaying the interest component and will never repay your loan so you should definitely avoid this option if you want to get ahead.

However, if you are paying off your own home, plus an investment property, you may find that paying Principal and Interest (P&I) is not the best solution for you because you may get some tax benefits on your investment property but not on your own home. Therefore, it may make sense to pay off your home as quickly as possible while maintaining the tax benefits on your investment property.
You can do this by paying P&I on your home loan and interest only on your investment property. It is important to speak to your financial consultant or broker to understand which scenario is best suited to you.

Reduce your loan term but give yourself flexibility

Normal loan terms are generally around 25 years but they can be as short or long as you want. Obviously the quicker you pay it off, the less interest you pay, so you are recommended to always pay off as much as you can afford to, as quickly as you can. However, even if you think you can pay your loan off quicker than the standard 25 year term, it is always a good idea to take out a loan for the full term to give yourself as much flexibility as possible.

Make repayments weekly or fortnightly, rather than monthly

What some people don’t realise, if that you can actually save yourself interest over the life of your loan by paying your repayments weekly or fortnightly, rather than monthly, as the interest is calculated on the reduced total so you are better off to reducing it as often as possible!

Make a lump sum payment to reduce your loan

If possible, you are also recommended to make one-off lump sum payments whenever you can to reduce your mortgage and the total from which your interest is calculated. Even if you have to redraw some of this lump sum payment down the track for other commitments, it has provided you with a short term benefit by reducing your loan and the amount of interest you will repay.

Make sure you have a redraw facility

It is also a good idea to have a redraw facility which allows you to apply extra repayments to your loan, reducing the balance, which remains accessible for withdrawal if required. This will reduce your mortgage but is important to make sure there are no fees associated with your redraw facility in the event you do wish to redraw some of the additional funds.

Use an offset account

In addition, you may also wish to speak to your lender about establishing an offset account. This account can be used as your general ‘day to day’ account but any surplus funds sitting in this account are used to offset your home loan and will be deducted from the balance of your home loan, thus reducing the amount you owe. Offset accounts can be used for a wide range of things including multiple incomes or even as a holding account for GST if you are self-employed!
Sure, the balance of this offset account will fluctuate but even if there is only a small amount in there, every little bit helps and you will be surprised how these little things can really add up over the life of a 25 year loan!

Use your online resources

Finally, play around with the various online resources available to you to find out how these tips and suggestions can save you money. The quickest and easiest way to test different repayment scenarios is to jump on the Resolve Finance website and check out the different calculators which will show you how you can pay off your mortgage faster. The calculators will show you how much time and interest you will save if you pay Principal and Interest; how much you will save if you decide to pay a lump sum off your home loan at any given time; how much quicker you can pay off your mortgage if you choose to make extra repayments on a regular basis; or how different interest rates over different time frames can affect how much you repay.


Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

When banks voluntarily do principal reductions

The holy grail of mortgage modification is principal reduction — the only thing which gets homeowners out of negative equity hell. And one of the big questions is why it’s not more common: it seems to make sense for all concerned, given that a sensibly modified mortgage is likely to be much more profitable for a bank than forcing a homeowner into a short sale or foreclosure and trying to sell off the home in the current market.
Last week the NYT, in a front-page story, found that Chase is actually doing principal reductions — quietly, on some of the most toxic mortgages written during the subprime bubble. But the mechanism was very mysterious — for one thing, the principal reductions were being done on many mortgages which were actually current and in good standing, rather than on mortgages which were careening towards foreclosure.
Philip van Doorn followed up, and my reading of his article — he doesn’t make this explicit — is that there’s actually method to the madness here. In order for banks to offer principal reductions, two criteria need to have been met: (a) they came into the mortgages via acquisition, rather than writing them themselves; and (b) they bought the mortgages at a discount.

Wells Fargo said that even though most of the Pick-a-Pay modifications had resulted “in material payment reduction to the customer,” Wells Fargo had not been forced to make larger provisions for loan loss reserves — which would have hurt earnings results — because of the aggressive write-downs taken when the loans were acquired…
JPMorgan had $24.8 billion in option-ARMS as of March 31 within in its $70.8 billion purchased credit impaired portfolio, acquired as part of the company’s purchase of the failed Washington Mutual from the Federal Deposit Insurance Corp.in September 2008. The PCI loans were written-down to fair value when they were acquired, and as of March 31, JPMorgan said that although it had set aside $4.9 billion in loan loss reserves for all of its PCI loans, “to date, no charge-offs have been recorded on PCI loans.”

It seems that Wells and JP Morgan are happy to do principal reductions only on the mortgages they bought at a discount from Wells Fargo and WaMu respectively; Bank of America, meanwhile, which inherited a bunch of these loans when it acquired Countrywide, is not doing principal reductions, and I don’t think it’s a coincidence that the Countrywide loans were bought at very close to par.
The behavioral psychology here is very easy to understand. No bank wants to admit that it wrote idiotic loans, and write down its own assets from par. Meanwhile, it’s much easier to write up an acquired asset, if the amount you reduce the loan is less than the discount you bought the loan for in the first place.
Economically speaking, however, what the banks are doing here does not make sense. Either writing down option-ARM loans makes sense, from a P&L perspective, or it doesn’t. If it does, then the banks should do so on all their toxic loans, not just the ones they bought at a discount. And if it doesn’t, then they shouldn’t be doing so at all.
The truth is, of course, that banks should be doing principal reductions, and they should be doing them on lots of their loans, rather than just the ones they bought cheap. And the fact that they’re already doing this, entirely voluntarily, on some of their loans is the best possible indication that it makes perfect economic sense to do so on all of their loans. Even if doing so might involve admitting that the subprime crisis still isn’t fully over.

Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

Mortgage reduction strategy: paying fortnightly

Most lenders will give you the option of making fortnightly repayments, but why is this so effective in reducing your mortgage? The concept is really very simple: there are 52 weeks in a year and therefore there are 26 fortnights.

By paying fortnightly you are effectively making a total of 13 monthly payments (26 divided by 2) rather than 12 calendar months – giving you one month’s extra repayment every year
It’s a simple concept but a potent one when it comes to driving down the amount you owe on your loan.
By paying your mortgage in fortnightly installments you could essentially wipe more than 4 years off the life of a 25 year loan term and save tens of thousands of dollars into the bargain.
And the best part is that once you factor the extra repayment into your budget you’ll hardly feel the pinch. Unlike other mortgage reduction methods that carry the burden of having to actively manage your mortgage on a monthly – even daily – basis, the fortnightly payment plan can be set up as a direct debit so you can simply ‘set and forget’.
It’s also less risky than other mortgage reduction methods.
Line of credit mortgages, for example, work only for the diligent, and not everyone likes living off their credit card. As soon as you start using your personal savings to buy essentials, the line of credit mortgage loses its effect as a loan reduction tool.
Just be sure to check with your lender that your loan facility allows you to make fortnightly repayments without any extra fees.
And if you’d like to put an even bigger dent in your loan, set up your fortnightly repayments over and above the minimum repayment, while keeping it manageable.
Not only will you better absorb the impact of interest rate movements, the extra dollars you invest will help knock down the remaining principal balance. This will ultimately reduce the interest you will have to pay and the term of your loan.


Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

Pay Off Your Mortgage Faster

A mortgage is a big commitment. Most mortgages are paid over 25 years, but we have some tips to help you pay your mortgage off faster. Reducing the number of years you make mortgage payments can add up to big savings.
There are several ways to “pay down” your mortgage and get out of debt faster.

1. You can increase your payment amount when you arrange your mortgage, or at any time during the term. This allows you to pay down your principal faster.
   For example, if you increased your mortgage payment amount by $170 from $830 to $1,000 you could save almost $48,000 in interest over the entire amortization period of your mortgage. You could also own your home about 8 years earlier.
   
2. You can make payments more frequently, which saves you money in interest charges over the long run as it allows you to pay down your principal faster.
   For example, if you made accelerated bi-weekly payments of $415 instead of monthly payments of $830, you could save almost $27,000 in interest over the entire amortization period of your mortgage. This would allow you to own your home about 4.5 years sooner.
   
3. You can use your pre-payment privilege to make a lump-sum payment. A lump-sum payment is applied directly to your outstanding principal if there is no outstanding interest owing. This saves you money over the course of your mortgage.2
   For example, if you made a $1,000 lump-sum payment, you could save almost $28,350 in interest over the entire amortization period of your mortgage. This would allow you to own your home about 4 years sooner.
   
4. You can pay as much as possible at renewal. All CIBC Mortgages become open at renewal. This means you can pay as much as you want on your mortgage before you renew.
   For example, if you chose 5-year, fixed-rate terms, and made a $10,000 lump-sum payment every time your mortgage came up for renewal, you would save about $37,481 in interest over the entire amortization period of your mortgage, allowing you to own your home about 6 years sooner.
   
   
   Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
   Our service will take you through the complete process of buying positive cash flow property, including:
   • educating you on positive cash flow and the ability to pay your mortgage off years in advance
   • saving you thousands of dollars in interest
   • supporting you in the decision on which property to buy
   • assisting in the organizing of your finances, if required
   • preparing you for settlement of contracts
   • liaising with other professional advisers on your behalf if required.
   Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance
   
   http://www.elitewealthcreators.com/
   sales@elitewealthcreators.com
   1800 GO ELITE