What’s the major reason that people want to have their house paid off? In most cases, people fear a scenario where they can’t pay their mortgage, so they spend more money up front. Too often, this puts them in the scenario they were trying to avoid. It all comes down to control, and a 30-year mortgage simply gives you more control. We’re going to run an experiment here, and see how you can actually save more money in your own pockets. Setting Up in Loan Analysis To begin, pull upRead More
Category: Loan Analysis
If you use the Loan Analysis calculator, you’re likely familiar with the “Loan View” provision. This enables you to do a side-by-side comparison of two loans, or view each loan individually. In the latest update of the Truth Concepts software, you’ll now see a third button: “Opportunity Cost.” The function of this button is to more clearly show what Todd has demonstrated in his comparison of a 15-year vs. 30-year mortgage. That is, you cannot separate the analysis from the time value of money. In previous demonstrations, Todd has usedRead More
How do you calculate the remaining number of months on a loan? This Loan Analysis “hack” makes it simple to determine, all you need is the remaining loan balance, the rate, and the monthly payment. For example, let’s say your client had a remaining loan balance of $50,000 and they’re paying 5% interest on that loan. Their payment is $1000, and neither of you know the exact time frame remaining on that loan. In Loan Analysis, once you fill in the loan balance and the interest rate, right click onRead More
When analyzing deals, you must pay attention to more than the interest rates alone. In the past few weeks, GM published an offer for a 2020 Escalade. The offer was either for 2.99% APR, or a $9,500 rebate. Is the offer all it’s cracked up to be? Let’s find out. The MSRP, or sticker price, of the Escalade is $76,490. The Dealer was offering it at a $1,500 discount. So $74,934. In order to get a full understanding of the difference between these two deals, we’ll use the Loan AnalysisRead More
When choosing a mortgage loan, it’s essential to look at all of the facts. Buying a home is a huge financial decision. Being equipped with the right knowledge will ensure you and your clients have the right strategy. A 15-year mortgage has the appeal of a quick payoff, but is it better than a 30-year mortgage? Some people would say yes. We’ll show you how to figure it out. In this installment of Prosperity Proofs, we’ll compare a “typical financial planning mortgage” to a mortgage in line with the ProsperityRead More
Is it true there is a difference in a Life Insurance company’s “in advance” or “in arrears” loan rate?
The answer is NO. The insurance companies have really confused this issue ( In Advance vs In Arrears) because they mistakenly call it a “rate” when it is not. The in Advance “rate” should be called a factor because all it is for is to multiply the loan amount by to determine the payment when made up front. Any loan balance is charged the In Arrears rate (which is an actual rate) even if the loan payment is made in advance. The reason the loan payment is less is simplyRead More