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wutamess
05-19-2005, 01:20 PM
Any of you guys know about the program that's bee voted as the #1 ebook which promises a way to quadruple your home equity and pay off your Mortgage in 10 years at the same time?

If so... what do you guys know about it?
Googled it but can't really find any informatino on it other than someone trying to make money by selling the concept.

RedNFeisty
05-19-2005, 01:23 PM
Contact World Savings and Loans, they have programs that can get a mortage paid off in 10 years. Or PM Bill Lumburg.

chagrin
05-19-2005, 01:28 PM
I am no expert, but I was in the business for 7 years. It sounds a little shady, there is no way to make you rprincipal go down without spending extra money, period. I was reading some of that website, mortgagecycling.com and it looks like a "carlton sheets" kind of thing. Your taking money from here and putting money over there, it all seems confusing, and shady. They have testimonials from "customers" who are thanking the creator of this program "personally". The book costs 67 bucks, just enough to make them quite a bit of money if they get enough people who will pay for the book but never read it.

chagrin
05-19-2005, 01:28 PM
P.S. Just add 50 bucks a month to your normal payment and you will pay it off years earlier and save a ton of interest

wutamess
05-19-2005, 01:31 PM
P.S. Just add 50 bucks a month to your normal payment and you will pay it off years earlier and save a ton of interest

I did the calculations and it doesn't change your length that long. I'd probably save 5-7 years but I was wondering about this mortgage cycling.

chagrin
05-19-2005, 01:41 PM
Give me the principal, interest rate and term (when it started and how much is left), I will help you out.

p.s. Isn't 5-7 years worth it? did you do the calculations of how much you will save?

P.S.S. You cannot build equity unless your land value goes up (and it will unless of course you live on a waste dump site) or you pay off extra principal

Donger
05-19-2005, 01:43 PM
Give me the principal, interest rate and term (when it started and how much is left), I will help you out.

p.s. Isn't 5-7 years worth it? did you do the calculations of how much you will save?

P.S.S. You cannot build equity unless your land value goes up (and it will unless of course you live on a waste dump site) or you pay off extra principal

I actually feel somewhat sorry for all the people utilizing interest-only loans.

chagrin
05-19-2005, 01:46 PM
Oh yeah, that's another bad move, most folks refi after that fixed "interest only" period runs out, they are never going to pay that thing off.

chagrin
05-19-2005, 01:46 PM
bring back maynard!

Donger
05-19-2005, 01:49 PM
bring back maynard!

ROFL

No.

SBK
05-19-2005, 01:56 PM
I actually feel somewhat sorry for all the people utilizing interest-only loans.

Ever seen how long it takes to pay any principal on a 30 year fixed? If you're not going to be there long, it's not such a bad idea.

If you get an interest only loan, and pay the 30 year fixed payment after 3 years you pay something like 15-20 times the amount of principal down you would have with a fixed rate note.

Donger
05-19-2005, 02:10 PM
Ever seen how long it takes to pay any principal on a 30 year fixed? If you're not going to be there long, it's not such a bad idea.

If you get an interest only loan, and pay the 30 year fixed payment after 3 years you pay something like 15-20 times the amount of principal down you would have with a fixed rate note.

Hmmm. Every mortagage I've ever had has had money applied to principal reduction from day one. Not much, of course, to begin with but still some.

jAZ
05-19-2005, 02:19 PM
I don't know what "mortgage cycling" is all about but there is a legit (and straightforward) way to pay down your debts rapidly.

Basically rank your debts by (shortest to longest) payoff time.

Then make minimum payments on everything but the debt that has the fastest payoff time.

Once that's paid off, roll that payments minimum payment into the payment you make toward the next bill. When that's done, roll both payments into the next bill... and so on.

I've run the numbers and I was able to pay off CC's in about a year (done) and both cars in about (2 years), my (large) student loans in about 5 years, and our mortgage in about 10-12 years.

Not rocket science... don't pay for this info.

Rain Man
05-19-2005, 02:53 PM
This article implies that "mortgage cycling" is nothing more than just making periodic large payments against the principal. If so, that's a fine idea, but the author's second point is valid, in that it takes your liquid assets and converts them to home equity that's less liquid.

He also makes the point that you can make those big payments by taking money from a home equity loan. Therefore, you're paying higher interest than you normally would, but you're paying down a long-term debt, thus saving more total interest dollars. The bottom line is that you're paying more money on a short-term basis (mortgage + home equity), but when you pay off the home equity loan your payment reverts back to just the mortgage (lower monthly payment than getting a 15-year loan or similar).

The bottom line is that it seems to just be a way to force yourself to pay down the principal faster. While there are some advantages, I don't see anything that makes it superior to just paying extra on your mortgage every month.



http://www.financepoint.net/mortgagecycling.asp

Mortgage Cycling - Brilliant or Risky
by George Burks

With mortgage rates hovering around 20-year lows, competition in the mortgage industry is fierce. It seems like every day a new mortgage loan strategy comes out that is suppose to be the best thing since sliced bread.

Whether it's a mortgage with no closing costs or an interest only mortgage, everyone is claiming they can save you a ton of money. Now someone has come out with something called Mortgage Cycling. Mortgage Cycling could save you thousands of dollars or it could cost you your home.

Mortgage cycling is a program that advertises itself as a method to payoff your mortgage in 10 years or less without making biweekly mortgage payments or changing your current mortgage. Does mortgage cycling work as advertised? The answer is unequivocally yes - with a few caveats. I'm going to let you in on the secret to mortgage cycling.

Mortgage cycling is based on making huge lump sum principal payments every 6-10 months. What this means is mortgage cycling works well for those who have at least a few hundred dollars in extra cash at the end of each month. The problem is most people don't have that kind of cash available.

For most people, Mortgage Cycling relies on using a Home Equity Line of Credit to make huge lump sum payments against their original mortgage principal balance. When you take out a home equity line of credit, you pay for many of the same expenses as when you financed your original mortgage such as an application fee, title search, appraisal, attorney fees, and points. You also may find most loans have large one-time upfront fees, others have closing costs, and some have continuing costs, such as annual fees. Home Equity Line of Credit interest rates are also higher than a typical mortgage loan interest rate.

While Mortgage Cycling does have some additional costs for most people, that is not what makes this mortgage reduction strategy risky. If you use a Home Equity Line of Credit and money gets tight, you could lose your home. Home equity lines of credit require you to use your home as collateral for the loan. This may put your home at risk if you are late or cannot make your monthly payments. And if you sell your home, most lines of credit require you to pay off your credit line at that time.

Prepaying your mortgage is smart. You can save tens of thousands of dollars in mortgage interest. For most people, mortgage cycling is risky way to payoff a mortgage. Be sure and look at your all of your alternatives before choosing Mortgage Cycling as a mortgage reduction strategy.

Copyright 2004 My Big Fat Mortgage.

"This information courtesy of http://www.mybigfatmortgage.net "

About the author:
George Burks works with small business and homeowners to reduce mortgage interest expense via http://www.mybigfatmortgage.net

ENDelt260
05-19-2005, 02:57 PM
I was in the business for 7 years.

Is that long enough that your soul is officially damned to hell now?

chagrin
05-19-2005, 03:04 PM
Is that long enough that your soul is officially damned to hell now?


If you are referring to the questionable business practices of brokers and most Loan "officers" I should let you know that I wasn't a Broker. Secodnly, I didn't sell my sould or lose it due to any ethics violations. I play everything straight and didn't screw anybody over. Probably why I am no longer doing loans for a living.

Rain Man
05-19-2005, 03:08 PM
If you are referring to the questionable business practices of brokers and most Loan "officers" I should let you know that I wasn't a Broker. Secodnly, I didn't sell my sould or lose it due to any ethics violations. I play everything straight and didn't screw anybody over. Probably why I am no longer doing loans for a living.


They can take your soul for ethics violations? Man, Big Daddy is right. Government is getting too powerful

chagrin
05-19-2005, 03:14 PM
Obviously however, I did lose the ability to spell correctly, ARRRGH!!!

ENDelt260
05-19-2005, 03:27 PM
I play everything straight and didn't screw anybody over. Probably why I am no longer doing loans for a living.

I figured there was a decent chance of a statement to this effect appearing in your response.

I didn't get f*cked over too awful bad on the refi I just finished, but it sure wasn't for lack of trying on the lender's part.

Thankfully I got some good advice from a friend (nice knowing a guy who's an accountant that recently audited a mortgage company) that saved me from being assed out of thousands of dollars.

Oh, and I promised some referrals.... so, if you're looking to get a mortgage from a company where the high level of dishonesty is rivaled only by their extreme incompetence, drop me a PM. I've got a name & phone number for ya.

Donger
05-19-2005, 03:29 PM
I figured there was a decent chance of a statement to this effect appearing in your response.

I didn't get f*cked over too awful bad on the refi I just finished, but it sure wasn't for lack of trying on the lender's part.

Thankfully I got some good advice from a friend (nice knowing a guy who's an accountant that recently audited a mortgage company) that saved me from being assed out of thousands of dollars.

Oh, and I promised some referrals.... so, if you're looking to get a mortgage from a company where the high level of dishonesty is rivaled only by their extreme incompetence, drop me a PM. I've got a name & phone number for ya.

Out of curiosity, what kind of negative experiences have you had with lenders? Examples?

ENDelt260
05-19-2005, 03:39 PM
Out of curiosity, what kind of negative experiences have you had with lenders? Examples?
They just lie to you every step of the way. Heh... I remember at one point in the negotiations the gal I ended up closing the deal with made a statement to the effect of conducting business the way I was was just going end in, "the best liar wins." I had to bite my tongue as my immediate thought for a response was, "Well, lucky you. You've got such a head start on the rest."

The funniest part had to be the phone call I received as I was driving to the title company to sign the final docs. Some guy from the mortgage company (not the gal I'd been working with, some supervisor) leaves me a voicemail explaining that the payoff statements for my existing loans came in a little higher than estimated, so my cash out was going to be lessened by 3-4 grand. It was complete and utter bullshit. One of the payoff statements actually came in a little less than was estimated. I'm not sure what he was thinking... I didn't bother to call back since I was on the way to the title company anyway. When I got there the numbers were right on the docs.

chagrin
05-19-2005, 03:42 PM
I had to bite my tongue as my immediate thought for a response was, "Well, lucky you. You've got such a head start on the rest."

I applaud you on your taking the high road...I have never been able to do that with most brokers, etc

Donger
05-19-2005, 03:42 PM
They just lie to you every step of the way. Heh... I remember at one point in the negotiations the gal I ended up closing the deal with made a statement to the effect of conducting business the way I was was just going end in, "the best liar wins." I had to bite my tongue as my immediate thought for a response was, "Well, lucky you. You've got such a head start on the rest."

The funniest part had to be the phone call I received as I was driving to the title company to sign the final docs. Some guy from the mortgage company (not the gal I'd been working with, some supervisor) leaves me a voicemail explaining that the payoff statements for my existing loans came in a little higher than estimated, so my cash out was going to be lessened by 3-4 grand. It was complete and utter bullshit. One of the payoff statements actually came in a little less than was estimated. I'm not sure what he was thinking... I didn't bother to call back since I was on the way to the title company anyway. When I got there the numbers were right on the docs.

Wow. F*ck that. I guess I've been lucky. Every mortgage I've had has been through one company and one sales puke, so I've not had such experiences.

Bill Lundberg
05-19-2005, 04:33 PM
I lie, cheat and steal from every customer that steps into my office. After all that's what we all do. It's amazing that you had such a horrible experience, yet didn't have the balls to walk away and find a better deal. If you don't shop and you feel like you get a bad deal then you have no one to blame but yourself. Don't get me wrong, there are too many people with the used car salesmen mentality in our business, but to lump us all together as crooks is insulting to those of us who do our jobs the way it's suppose to be done.

chagrin
05-19-2005, 04:37 PM
I lie, cheat and steal from every customer that steps into my office. After all that's what we all do. It's amazing that you had such a horrible experience, yet didn't have the balls to walk away and find a better deal. If you don't shop and you feel like you get a bad deal then you have no one to blame but yourself. Don't get me wrong, there are too many people with the used car salesmen mentality in our business, but to lump us all together as crooks is insulting to those of us who do our jobs the way it's suppose to be done.


That's what I was trying to say at first too, however, if ya want to clean up the image start with getting a new avatar...HAHAHA!

Just messin dude

ENDelt260
05-19-2005, 04:40 PM
I applaud you on your taking the high road

It wasn't so much about taking the high road as it was thinking such a comment would likely have a negative impact on the ongoing negotiations.

ENDelt260
05-19-2005, 04:46 PM
It's amazing that you had such a horrible experience, yet didn't have the balls to walk away and find a better deal.

Funny. Just how do you think I got her to sweeten hers? I got other offers. Then went back and said, "Hey, Bank X is offering this. Beat it."

After calling enough banks eventually people stopped topping the offer I had on the table.

Demonpenz
05-19-2005, 04:48 PM
man those people are going to eat me alive.

Bill Lundberg
05-19-2005, 04:57 PM
Funny. Just how do you think I got her to sweeten hers? I got other offers. Then went back and said, "Hey, Bank X is offering this. Beat it."

After calling enough banks eventually people stopped topping the offer I had on the table.


Good for you, but I would always go back to the lender who gave me the best offer the first time. To me that's how to tell who is shooting you straight and who is trying to take advantage.

ENDelt260
05-19-2005, 05:06 PM
Good for you, but I would always go back to the lender who gave me the best offer the first time. To me that's how to tell who is shooting you straight and who is trying to take advantage.
Most offers started in the same general neighborhood. Then I let them know that that offer wasn't really any better than what I already had (or, possibly, was worse) and the offer would get sweetened.

This time through was a learning process for me. I'm hoping for the next to be considerably less painful since I'll know what I'm getting into at the start instead of figuring it out along the way.

Bill Lundberg
05-19-2005, 05:12 PM
The first time can always be scary!! :) :)
It's all about educating yourself and knowing what your situation is (credit, income, debts) before you start. I'm amazed at how many people I talk to who say "oh I don't know" when asked how much they make or what there credit is like. How the eff could you not know how much money you make or if you pay your bills on time!?!

Rain Man
05-19-2005, 05:14 PM
Good for you, but I would always go back to the lender who gave me the best offer the first time. To me that's how to tell who is shooting you straight and who is trying to take advantage.

I agree. That's the gentlemen's code. You gave them all the same requirements, and they gave you their price. If you go back and shop their bid around, it's not fair to them and it'll probably get you someone who's going to take shortcuts, or worse.

ENDelt260
05-19-2005, 05:22 PM
It's all about educating yourself and knowing what your situation is (credit, income, debts) before you start. I'm amazed at how many people I talk to who say "oh I don't know" when asked how much they make or what there credit is like. How the eff could you not know how much money you make or if you pay your bills on time!?!

Heck, that's the easy stuff. I was just unfamiliar with the whole negotiation process. I just stumbled through it this time. In the end I came out okay though. Maybe I might've been able to do better, but by the end I was just burnt out on the whole ordeal. I'd already managed to save myself a few grand so that made it a little easier to decide to sign rather than continuing.

ENDelt260
05-19-2005, 05:28 PM
I agree. That's the gentlemen's code. You gave them all the same requirements, and they gave you their price. If you go back and shop their bid around, it's not fair to them and it'll probably get you someone who's going to take shortcuts, or worse.
Wait... I don't think I'm understanding you right. Are you saying a person should get offers from X lenders, and whichever one makes the best original offer go with them? That wouldn't be very smart at all. If I'd done that, I would've just been throwing money away.

What's wrong with this scenario? Get offers from Lenders A, B, and C. Whichever of the three is best, fax it to the other two and tell 'em to beat it. Receive the two better offers. Whichever is better of the two, send it to the other two lenders again and tell 'em to beat it. Continue this process until the offers stop getting beat.

Rain Man
05-19-2005, 06:59 PM
Wait... I don't think I'm understanding you right. Are you saying a person should get offers from X lenders, and whichever one makes the best original offer go with them? That wouldn't be very smart at all. If I'd done that, I would've just been throwing money away.

What's wrong with this scenario? Get offers from Lenders A, B, and C. Whichever of the three is best, fax it to the other two and tell 'em to beat it. Receive the two better offers. Whichever is better of the two, send it to the other two lenders again and tell 'em to beat it. Continue this process until the offers stop getting beat.


I know where you're coming from, and maybe it's different in personal finance than in business. In business, though, that's frowned upon, mostly because of its long-term impact.

In my situation, for example, let's say that I need to hire a subcontractor to make the phone calls on a telephone survey. I do just what you're proposing, and I get someone to cut down their price. What just happened? Supposedly, they gave me their fair price the first time, so now they're going below what they think is fair. Therefore, it creates an incentive for them to cut corners to keep their profit margin up.

The real damage, though, comes the next time I need the service. I go out and ask these folks for bids, and no one's going to give me a fair price. They're all going to give me inflated prices, because they know that it won't hurt them, and might help them. I'm going to come back again with the lowest bid (which is still inflated if everyone's smart), and they can choose to beat it by a buck.

Now imagine the tenth time I get bids from them, two years down the road. What kind of prices am I going to get?

If you're a small business and you're acquiring some sort of service where there are eight zillion bidders, you can get away with bid shopping, most likely. Same thing with a service that you expect to buy very infrequently. But if it's a task where you're going to be making many purchases over time, or a task where there are very few people available to make bids, it'll bite you hard in the long run.

I did a study on this several years ago in the construction industry, and even in a big industry like that, there were firms that had reputations as bid shoppers, and they had a harder time getting bids than did firms that just said, "One shot. Give me your best bid." The one-shot firms probably got better bids, too.

Again, though, it probably doesn't make a difference with individual purchasers like the case you're describing, because you buy mortgages infrequently and you've got eight zillion lenders out there. A lot of businesses get ticked if you shop their bid around, though.

ENDelt260
05-19-2005, 07:48 PM
Yeah, I'm certainly not trying to maintain any sort of ongoing relationship with this particular mortgage lender. And they're not really selling me something tangible they can cut corners on. It's all numbers on a ledger somewhere. They're making money on this thing on the backend. Why should they get four grand in closing costs out of me? F*ck that.

In contrast, I had no intention of playing things out like I described w/ the bids on my deck. I might've asked the guys about the differences in implementation between theirs and others bids... but, in this case there's something real here. I don't want my deck done as cheaply as possible, I want a quality job. (Course, the deck thing didn't play out like that anyway... as it was, the bids were slow coming in... I showed Phil the first one just to get his opinion on it... and he told me he could make me a super kickass deck for that price... and now I have a new houseguest. But, I digress.)

Herzig
05-19-2005, 08:26 PM
bankrate.com has an excellent mortgage calculator that will help out many here. It can show you how much an extra payment of whatever dollar amount a month or a year will cut off the principal and life of the loan.

Here it is

http://www.bankrate.com/brm/mortgage-calculator.asp

Mortgage insurance is the biggest waste of money out there. If you can't afford to put 20% down, you're better off getting an 80/20 and avoiding mortgage insurance all together. For people that have excellent credit, there are mortgages out there that are 100% without mortgage insurance. I have one. The only catch is that I cannot refi or sell within 5 years or I pay a 5% penalty. I can always rent this house out if I need to, like I'm doing with my first house.

Herzig
05-20-2005, 10:04 AM
Man, I didn't realize rates are back down to last year's levels. Looks like a good time to buy and sell.