Mortgage Free For Life
Mortgage Free For Life – Mortgage Free For Life is a software/program/website by Richard Weathington and Beth Ley that shows you how to pay your 30 year mortgage in 4 years.Here is how it works:
Q: What is LEAP®?
A: LEAP® stands for Loan Equity Advantage Program. It is designed to build equity FAST so you can pay off any loan. LEAP® is an online account system that incorporates your checking and savings accounts with a HELOC. Through this program and state-of-the-art software system, homeowners have the ability to pay off their 30-year mortgage in as little as one-third of the time, without refinancing (assuming they are in a good loan for this program to work) their existing mortgage loan or increasing minimum monthly payments. See www.LEAPequity.com and fill out a free loan evaluation form to see if your current loan program will work best. A 30-year fixed loan may not be the best program for you to obtain the lowest possible monthly payments.
Q: Why am I applying for a home equity line of credit, and how is it associated with my savings and checking accounts?
A: The LEAP® Program uses the home equity line of credit solely as a vehicle or a tool to drive the program. The equity line of credit must have the capacity to operate similar to a primary checking account and be set up with an open-end interest calculation vs. a closed-end interest calculation. Combined with the LEAP® Software, this creates a formula in which the money in your line of credit account generates an interest cancellation on your primary mortgage.
Q: What makes the loan pay off sooner?
A: Direct-deposit of your income into the HELOC has an immediate and dramatic impact on your principal balance. With this loan, interest is based on your daily balance, so when your paycheck hits, you start saving interest compared to a traditional loan. This leaves more of your income available for principal, accelerating the buildup of equity with no change to your spending habits. Naturally, the more positive cash flow you have, the faster your loan paydown will accelerate.
Q: If I pay off early, will I lose my tax deduction?
A: Yes, and this is good . . . because you will no longer have a mortgage. We believe that “interest is not in your best interest.” How does paying $3,000 in interest to get approximately $1,000 in tax deductions make for a good long-term strategy? LEAP® can help you get rid of your mortgage faster. And, of course, while you’re still paying down your balance, the interest you do pay IS deductible.
Q: Why is the rate slightly higher than other loans, and what if rates go even higher?
A: Here is where we’re changing the way mortgages are viewed. It’s no longer about the rate. It’s about how many dollars of interest you pay on a given principal balance. And because with this loan your principal balance is continually forced down by your direct deposits, this can even offset the effect of higher rates. Even, depending on your cash flow, if rates double! The power of your money sitting in your mortgage is amazing.
Q: Who is the ideal customer for this program?
A: This program is ideally suited for responsible homeowners with positive cash flow who understand that placing their cash against their mortgage balance can earn them a much higher effective return than in a low-interest checking or savings account.
Q: Can I do this program on my own, without going through LEAP®?
A: Yes, but, while most people have good intentions, many have a hard time maintaining the discipline to keep up the program. The LEAP® Software makes the program a breeze and creates a higher success rate than for those who attempt to become debt free alone.
Q: I have a bad credit score. Can I qualify for LEAP®?
A: It is important to go through a quick 5-minute questionnaire when applying for the LEAP® program. Fortunately, there are several avenues that can be taken to gain approval, but the LEAP® program is not for everybody. See pages 103-154 to improve your credit score.
Q: Why can’t I make extra principal payments to my primary mortgage and achieve the same results?
A: Simply put, the mathematics behind LEAP® present a sophisticated process that has a substantial financial benefit over increasing your monthly payments. The algorithms in the proprietary LEAP® system are systematically programmed to create the highest interest savings possible in the least amount of time. The math engines programmed in the LEAP® system calculate the specific timing and dollar amounts required to produce the most optimum savings possible. You also have no access to that money after you have put it into a closed-end loan. The HELOC is an open-end loan.
Q: If I am not increasing the monthly payments on my mortgage, how can this program be possible?
A: The LEAP® system makes a connection between your bank account, the home equity line of credit and your primary mortgage. Each time you transfer income into your account it registers as a decrease to your mortgage balance. By decreasing your mortgage balance you now lower the balance on which interest accrues. By decreasing the balance on which interest accrues, you increase the portion of your monthly payment that is credited toward your principal pay down. The LEAP® system determines the specific timing and amounts for each transfer required to produce the quickest pay-off time and highest interest savings possible. There are also multiple financial options programmed into the LEAP® Software that assist homeowners in paying down their mortgage as soon as possible.
Q: Can I make extra lump-sum payments in addition to my payroll deposit?
A: Anytime, and this can be beneficial. Moving funds from low-interest deposit accounts or poorly-performing assets into your mortgage will reduce your principal instantly, and save you even more interest, allowing you to pay off even sooner. And, you have access to the additional equity this creates.
Q: Should I put all of my available cash into the mortgage?
A: Putting “all of your eggs in one basket” is usually not a good idea. If your cash is earning less than your mortgage interest rate, it could be an excellent idea to move a portion of it into the mortgage. Instead of “earning” 1-2% on your deposits, for example, you’ll “save” 5-6% on your mortgage. In effect, you get the same advantage the banks now enjoy with your money. Again, you have access to your available credit line if you do need it.
Q: Should I close my old checking and savings accounts?
A: No. But to maximize the effectiveness of the product, you will want to flow as much of your cash finances through this new account as possible. The more funds you “park” in the account, the lower your daily principal balance, and the more interest you save.
Q: Does it make sense to move my savings accounts over to LEAP®?
A: Yes. In moving your savings into your LEAP® account, you decrease even further the amount of time left to pay off your mortgage. Your customized online site has the ability to build a variety of financial models to help you understand the effect that the money in your savings account will have in decreasing the amount of time it will take you to pay off your mortgage.
Q: Are my payments FDIC insured?
A: No. This is a line of credit mortgage, not a savings account, and therefore not FDIC insured. You are paying down your mortgage, not making a deposit in the traditional sense. Years of traditional banking has trained us to think we need to have a “pile” of money somewhere, when in reality, the banks are using it to loan money to others. They are making a lot more off us than we are by having the money there.
Q: What is the risk involved?
A: From a financial standpoint, there is very little risk. No stock market crash or extreme interest fluctuation can totally eradicate the expected outcome. Only homeowners who qualify to significantly reduce their mortgage payoff time and interest will be activated on the LEAP® program.
Q: How do my house payments get paid? Do you make them for me?
A: No. We do not have any access to your accounts. You will be initiating all transactions by following the prompting of your online account. You are in complete control.
Q: Do you have access to or control of my money?
A: No. You are the only person with access to your accounts.
Q: Do I pay interest on the home equity line of credit?
A: There is interest charged on the home equity line of credit. But because your income is sent to your line of credit at different intervals, the bank adjusts the amount of interest they charge you by offsetting the average loan balance. As a result, the interest charged is much less.
Q: What happens when I pay off the loan EARLY?
A: If you pay off the loan early, you still have access to the accumulated equity, up to your credit line amount, until your 30-year term is complete. If you continue to make deposits into the account, and your loan is paid in full, those deposits will earn interest at a competitive rate. If your home is paid off, imagine what you could do with all that money you were paying on your mortgage.
Q: What happens if my home loses value?
A: Just like any mortgage, you owe the amount you’ve borrowed, regardless of what happens to the value of your home. When a home devalues, some people can end up owing more on the house than the house is worth. However, since LEAP® allows you to pay down principal faster, you’ll stand a better chance of avoiding being “underwater” on your loan versus a traditional loan.
Q: How do I find out how fast my loan should pay off?
A: Simply refer to your LEAP® Software. It does all the calculating for you.
Q: How do I access the home equity line of credit for expenses?
A: Just like you access your bank account. You have online access to view your account balances and transactions, and you can access funds via check, debit card, ATM, EFT, ACH and bill-pay.
Q: Do I need to change my spending habits?
A: No, you do not. As long as you have positive cash flow, changing your spending habits will not be necessary. Plus, since more of your income will be going towards your loan principal, you’ll likely come out ahead even then. However, if you can find a way to trim expenses even more, you’ll pay off your loan even earlier.
Q: Is there a maximum amount you can draw from the account?
A: You can draw up to your credit line; the amount you have available is the difference between your principal balance and the line amount.
Q: Isn’t access to all that equity a bit dangerous?
A: As with any of your finances, you need to be disciplined. You probably get several credit card offers each week, and can easily open a home equity line of credit to access your home’s available equity. Either option offers you the same ability to get into financial trouble.
Q: Can I use this loan as a platform from which to make other outside investments?
A: Absolutely. Sophisticated investors will see it as an opportunity to “borrow” money from their available equity and “reinvest” it in an outside investment at a higher rate of return, netting the difference between the two.
Q: What happens if I move?
A: The LEAP® program follows your mortgage until it is paid off. The home equity line of credit the LEAP® uses will have no effect on your ability to sell your home. Once you have sold your home and purchased another residence, you can put LEAP® back into action on the new residence. Also, all the equity built up in the account, as well as the equity built with market appreciation, will make a great down payment on your next purchase.
Q: Can I have several investment properties at one time and utilize just one LEAP® program, or do I need one for each property?
A: The LEAP® is most effective when used to payoff one property at a time. As each property is paid off, your overall discretionary income can increase; creating an accelerated payoff period for each subsequent property.
Q: What portion of the interest I pay is tax deductible?
A: Since this is a mortgage and it represents the acquisition debt on your property, under IRS pub. 936, the interest you pay may be tax deductible.
Q: Do I have to refinance my existing mortgage loan to make this work?
A: No, but some first loan programs work better than others. You may choose to refinance your existing mortgage loan for additional interest savings, but refinancing is not required for LEAP® to work. If you do not currently have a specific line of credit, you will need to open one.
Q: Will LEAP® work with an interest-only or negative amortization payment on my primary mortgage?
A: Yes. In fact, LEAP® helps you to take control of the outcome of these types of loans that will benefit you substantially.
Q: How does LEAP® compare to interest-only or negative amortization loans?
A: For loans $300,000 and under, Option Arm loans with the lowest payments seem to work better. However, an interest-only loan for a fixed time period is the safer route with larger loans. Call a LEAP® specialist at 1-800-240- 4671 or visit www. LEAPequity.com for more information. 101 www.LEAPequity.com 1-800-240-4671
Q: Are there mortgage companies in the U.S. designed to deal with this type of financing?
A: In the U.S., currently less than a handful of firms offer these types of mortgages. One of them is Juniper Lending. Call 1-800-240-4671 or visit www. juniperlending. com for more info.
Q: Can I use this system to pay off current credit card bills, car loans, or other debt?
A: Absolutely. You can and you should. The interest you pay on these other debts is NOT tax deductible. Interest paid on homes is tax deductible! If you have other debts, this system should be used to clear other debts first, then work on the mortgage.
Q: Can I get LEAP® at any bank?
A: No. Not all mortgages companies and banks are designed to handle this type of loan.
That’s all we have for now on Mortgage Free For Life.*Sponsored Links*