1. Be the Banker: For centuries, banks have made millions of dollars taking advantage of the money customers have “sitting” in their checking and savings accounts. When the customer is not using their money, they take it and lend it out and make interest. The Mortgage Wedge reverses the tables and allows the consumer to be the banker. While you are not using the money in your checking and savings accounts, The Wedge allows you to “sweep” the money and apply it towards your mortgage balance. If your mortgage balance is less, you owe less interest on your monthly mortgage payment. Therefore, when you pay your monthly payment, more of the payment goes towards principle since less interest is due. The key to The Mortgage Wedge system is that when you need your money to pay bills or for emergencies, you can sweep the money back to your checking to pay your bills. We will discuss how this is done in a moment.

2. Pay extra principle payments: The #1 reason customers do not pay extra money towards their principle balance is simple. Let’s say you have $500 left over at the end of the month when you pay all of your bills. Most people won’t pay extra on their mortgage because once they pay the extra amount, they can’t get it back. That fear of needing extra money in the future prevents extra payments and “forces” customers to pay their mortgage off in 30 years, accumulating an astronomical amount of interest.

The Mortgage Wedge allows you to pay extra towards your principle. If you need the money in the future, you can sweep it back into your checking account. So, now a customer can have $500 sitting in their checking account and apply it towards their mortgage. If they ever need the money in the future, The Mortgage Wedge allows them to sweep it back to use. In the meantime, you have lowered the amount of interest you owe your mortgage company because you owe less interest.

THE AMOUNT OF INTEREST YOU OWE THE BANK = INTEREST RATE AND LOAN BALANCE.

We have all been focused on the interest rate for years. Now it is time to focus on your balance because it is equally, if not more important.

How does this program work? The Mortgage Wedge Account system helps create an account that sits, or wedges, in between your checking account and mortgage account. The Mortgage Wedge proprietary software works in conjunction with this “Wedge” account. The software was developed using complex mathematical principles. The end result for the consumer is a very simple and user friendly program that is easy to use. Basically, you continue to do everything you do right now, but just a little different. You are given specific instructions on the mild differences.

A few more key points:

1. Works great if you have a first and second mortgage (or HELOC).
2. Works with primary homes, second homes and investment properties.
3. Works if you start a new mortgage. This includes refinancing, moving to a new home and mortgage, etc.
4. Once you pay off one mortgage, you can use the Mortgage Wedge system for another loan.

As close to the Pacific Ocean as you can get Oceanside California real estate is always in high demand. While you’ll see median price listings for Oceanside California real estate as low as $428,000, keep in mind that those listings usually include foreclosed homes and smaller sized condos in addition to single family dwellings. A more accurate number may be an average price of around $560,000 for a single family home sold in 2006. Some good news for potential homebuyers of Oceanside California real estate is that 2007 prices have dropped an average of $25,000 on the market as a whole. Even so, if you’re looking at Oceanside California real estate for your next home or property- having your finances in order is a must.

Preapproval and Loan Options for Oceanside California Real Estate
Hopefully the first decision you make when viewing the Oceanside California real estate listings is to determine what you can afford. Taxes, PMI (private mortgage insurance), inspections, closing costs, and the additional expenses of home maintenance should all be considered. If you’re a first time homebuyer and are unfamiliar with any of these terms you need to do a little research on mortgage terms before setting out in search of your new Oceanside California real estate purchase.

The next step for many buyers is to make sure that your credit score is as good as it can possibly be. Don’t make any other major purchases or open any new credit accounts for six months before applying for a mortgage loan. Your ability to get preapproved and to get a good interest rate is on the line.

Getting preapproved in a fast-moving market is essential. If you’ve ever watched one of those reality shows on buying a house and seen hopeful buyers loose out to faster competition- chances are it involved Oceanside California real estate. That doesn’t mean you should buy in desperation; rather be as prepared as possible. If you do lose out on your first Oceanside California real estate choice- there will be another. But having your pre-approval ready won’t put you in jeopardy of losing a home you love while you wait for the mortgage lender to close the deal.

Interest rates for Oceanside California real estate will depend on factors like the amount of your down payment and your credit history. Currently a 30 year fixed rate loan can be obtained around 6.2%; a 15 year fixed rate for 5.8%; and a 5/1 ARM (adjustable rate mortgage) at 5.83%. These could change tomorrow, and vary today from lender to lender. So do yourself a favor and get some different quotes before committing to anything.

Finally, loan options for your Oceanside California real estate purchase may save you thousands of dollars in the long run. The lower rate of a 15 year fixed loan or a 5/1 ARM can save you thousands in interest if you can handle the higher payment or future change in rate. These options have become more difficult to obtain for buyers with questionable credit histories. But if you understand the ramifications of these loans and can qualify for them, an alternative to conventional loans can save you a lot of money on Oceanside California real estate.

There are going to be plenty of surprised folks in the near future when they go to sell, refinance, or use some equity in their home and they find out that they’ve gone backwards. Some of my new clients have asked me, “How can it be that I made my $2000 monthly payment on time each month for over a year, and I now owe $15,000 more than when I started?” “I even got this great 1% interest rate,” they exclaim.

“When you got this loan, did your broker or lender mention the words ‘Option ARM’ or ‘MTA Option’,” I’ll ask them. I typically hear, “Uh…yeah…I think that sounds kinda familiar.”

Nine times out of ten, consumers will get hurt if they have various payment options. Payment options are made worse by being coupled with an adjustable rate mortgage (ARM). Very few borrowers have 1) sufficient understanding of “negative amortization” and, 2) the discipline to make the appropriate payment to avoid negative amortization.

Let me break down what I just said into a bit more detail:

The MTA Option ARM is, first of all, and adjustable rate mortgage. Lenders or brokers that sell this type of loan will certainly use “1% interest rate!” as a selling point. Unfortunately, this rate will not last. When the rate on this loan adjusts, it will be based on the monthly treasury average (MTA). Typically, there is a margin that will be added to the MTA (the actual margin on your loan should be disclosed in your loan’s note which you received at closing). Let’s say, for example, your MTA Option ARM carries a margin of 3.25. Let’s also assume that the monthly average yield on the treasury market is 5.25% when the rate is due to adjust; the new rate will be 5.25 + 3.25 = 8.5%.

The Option ARM gives the borrower payment options, hence the name. The three payment options are a normal principal and interest payment (PI), interest only (IO), or a third smaller amount that doesn’t even cover the interest charges. With the smallest payment option, the deferred interest is simply tacked onto the loan balance; this is called negative amortization. You now understand how people can make regular payments only to see their loan size increase; they’ve been making the smallest payment possible, so they can “afford” a larger home.

Now, the lender will not allow this increase in loan size to go on indefinitely. It wouldn’t make sense for them to assume the risk on a loan when the balance now far exceeds the value of the home. Therefore, once the loan amount reaches a certain percentage of the value of the home, the lender will require the borrower to begin making a normal PI payment. It is very possible that by this time the rate has adjusted from the 1% to 7.5%, 8%, or more. This rate adjustment will also severely impact the new payment. The borrower was used to paying, say, $800 per month. Now they are shocked to find out that they have to start paying $1,800 per month, and the balance on their loan has gone up $20,000.

In this case the people owe more than the house is worth, so they can’t sell it. They can’t afford the higher monthly payment. Maybe their credit was shaky to begin with, so the easiest this to do is to walk away from the home and let it go into foreclosure.

It is unfortunate that many people found themselves in these loans that can be quite confusing to consumers. Bad loans such as these are major contributors to the extreme number of foreclosures we are seeing now, and the problems in the subprime market.

I have never sold a single MTA Option ARM, and won’t (there are only a couple of instances in which one might make sense, but that is beyond the scope of this article). There are very few ethical, honest, high-quality mortgage professionals today. I am proud to be one of the few.

Paying off your mortgage early can be a smart way to save money. You can eliminate the thousands of dollars you pay in interest by paying off your mortgage. Although you can do this in several ways, financial advisors have created a money merge account, a fast way to pay off your mortgage based on models from other countries such as England and Australia.

A money merge account works with your mortgage, an equity line of credit, and a software calculator to determine the fastest route to payoff your mortgage. Although a typical mortgage can take thirty years to payoff, a money merge account shows you how to pay off your mortgage in about ten years, depending on your financial situation. The system works by decreasing the mortgage balance each time that you deposit money into the MMA. With a lower balance, you will have less accrued interest. More money will go towards the principal balance of your mortgage, rather than the interest, so you can pay off your mortgage in a significantly shorter amount of time.

There are several advantages for using MMA. First, the software calculates all the variables of your income and bills. This gives you a personalized plan that becomes more efficient as you use and follow it. It also gives you more financial freedom. You can vary your income each month as well as the payment date, which is helpful if you have a commission based job or receive extra month from a bonus. You can also consolidate other debts using MMA. The mortgage interest rate is much lower than high interest rate credit cards, thus saving you more money. You can even monitor each debt separately, and set up a plan to be debt-free by a certain date. MMA also allows you to save for other purchases or for an emergency fund. Overall, it saves you money and allows you more financial freedom.

If you are considering an early mortgage payoff or have more questions about how a money merge account works, there are several experts at United First Financial that can help. They offer informative seminars across the country, or you can set up a personal interview and see how the program will work for you. Be sure to also research other options so you can be mortgage-free in the shortest amount of time.