In my last post I talked about the seriousness of debt in America. I was ...and still am... incensed that the Treasury and our government think that the only way out of our current economic crisis is to have Americans spend more! It's craziness!
I have taken a new approach and it is unbelievabley exciting. I am using technology to get myself out of debt. If you have a moment I want to tell you a little story about my own situation.
You see, I own a mortgage company, and we're not doing so well right now. LOL. But that's okay, I'm blessed with a beautiful wife, good health and the God given talent to know when I have to change my business and my life to succeed.
I own a home in the burbs and two investment properties. I have about $20K in debt associated with my business. Total all the money I owe and it is over $750,000. That's three quarters of a million dollars! It's a little daunting to think I owe this much money, especially since I'm not wealthy by any stretch of the imagination.
My rentals break even every month, my mortgage biz is in the tank and my wife got laid off from her architecture job. Thank the good lord above for the severance package. Anyway, we would love to lower the interest rate on all of our mortgages, but with an income equal to our debt payment every month, we don't qualify.
So I sat down to try and figure out how I could get out of debt. Sell the rentals? Not in this market, I'd take a huge loss. Sell the primary, same thing, and I lose all that equity. Then I found a better answer....
Technology!
There is a lot to be said about technology and what it has done for our country and our standard of living. Now there is a tool that can help me become DEBT FREE in a very short period of time. Under my current repayment structure, I will be debt free in 35-37 years (that's because of some of the interest only mortgages I have.)
However, using this software and paying my bills the way the software instructs me to, I can be DEBT FREE in 16 years without changing my income structure. How is this possible you might ask? I know I did, I couldn't believe it!
Well I did some research. The software recognizes long-term debt in two categories, open ended and closed ended debt. In the closed end debt your interest payments are static and are set on an amortization schedule that gives the advantage tot he bank. You pay them the interest first and the majority of the principal is paid at the back of the loan. Good for the bank, bad for you.
In an open ended loan, an equity line or a credit card, the interest calculation is dynamic. Interest is calculated based on the average daily balance. The software picks strategic times throughout the year and within the am schedule of the closed end loan and uses the open end debt to pay off chunks of principal in the closed in loan.
This strategy is important because the larger the chunks of principal that are paid on the closed end loan, the more principal reduction you will achieve with the regular payments on that loan. Once the debt is transferred to the open end loan, the software has you transfer income into that loan to lower its balance immediately.
At first blush this sounds a little scary, but here's the important part. You pay your monthly bills out of the open end loan. This has a two fold effect on your debt. First, it lowers the average daily balance of the open ended loan. This means that you are actually paying a lower effective rate on the principal balance that was 'in' the closed end loan. Second, it gives the ability to operate your home finances in the same fashion you always have, there is very little change to the way you live your life.
Under this program I will save over $450,000 in interest payments. Even if I sell the investment properties in 7-10 years, I will increase the equity in those properties by more than 10 times the current schedule! That will mean hundreds of thousands of dollars in my pocket.
Do you want to be DEBT FREE? I am so excited about this program I have added it as a product in my company. If you can't refinance and you want to get out of debt, or if you can refinance and create lower payments and you want to use that payment savings to get out of debt faster, I would like to show you what I can offer.
Give me a call and become debt free today.
Michael Gross is the President of Dividend America Mortgage and has been in real estate for over 20 years. He has been a builder, a Realtor, an appraiser, and currently he is a lender and an active real estate investor. He uses all of his experience and knowledge to show individuals how to properly use a mortgage as a tool to help create greater wealth through real estate investing. For more information on residential and small commercial loans please call 770-350-7373 or email mgross@dividendamerica.com
Posts
No comments:
Post a Comment