How to Be Mortgage Free

Did you know you will pay close to three times the purchase price of your home before you actually own it?

Learn the secrets to becoming mortgage free. Save thousands of dollars in payments and secure your future in uncertain times. It's easier than you think...

What if you could tap into a simple, powerful “be mortgage free” system - designed to help you pay off your mortgage in less time than you ever thought possible - while receiving expert coaching and support through the whole process? Would you be interested? Then call 0800 236 678 and talk to one of our Advisers

You’re Not the Only One

I know myself that mortgages can be a very complex and confusing topic. When you bought your home you didn't want the mortgage; you wanted the security of owning a home. It's the Kiwi dream, but borrowing hundreds of thousands of dollars is part-and-parcel of home ownership. After 23 years of banking and 10 years as a mortgage adviser, I am still not surprised when I meet homeowners who did not understand what and how much they had to repay the bank... people who found their new mortgage was costing a fortune; who found that money was pouring through their fingers and into the banks coffers. Our goal is to show you how to prevent making the same mistakes that many homeowners make... It's a lot easier than you think! For more info call 0800 236 678

You worked hard to buy your house and you deserve to know all the true facts about owning a home, having a mortgage and the real cost of home ownership. When you learn the truth you will be stunned to see that your mortgage is probably robbing you blind.

Mortgage debt has spiraled from $63 billion dollars in 2000 to $153 billion dollars in 2008 and mortgage repayments absorb a staggering 48% of the medium joint Kiwi’s take-home pay.

And for what?!

Usually, the total amount of interest and principal paid over the life of your loan is about three times the size of your mortgage. Only a third of the money you pay to the lender is actually what you borrowed. The rest is interest. So, for example, if you have a loan for $100,000, over 30 years at say 9% a year, you would repay exactly $289,664 to your bank.

That huge sum - a whopping $189,664 in interest - is the cost of your $100,000 mortgage, and it's going to somebody else. Why would you put up with this, when that money could be working for you by building your financial well-being, instead of your banker’s?

Let me ask you a simple question: 

Do you really want to work 30 years just to give your lender a massive, out of proportion chunk of your hard-earned cash? This is nothing less than committing to a life of debt. If the answer is no..then call 0800 236 689 today 

Kiwis Move and Debt Stays Put

In New Zealand, the average person moves home every 7 years. When most people move into their new home, they get a new 30 year table mortgage and go right back to payments where 92% of the amount is going towards interest. If you fit that average Kiwi label, you'll probably never pay off a house in your lifetime... unless you learn the secrets of how money works.

Think of it like this. If you have a $100,000 mortgage at 9% interest and you move house after 7 years, you will still owe 93.6% of your original loan - that's $93,640.

Of the thousands of dollars you have paid over 7 years, you will only have reduced the principal by $6,359, because most of your payment for the first 7 years goes towards interest which is a massive $61,049

After 10 years (120 months of payments), you'd still owe about $89,430 or 89.5% of your mortgage balance. The dirty, costly secret is... It literally takes 23 years of mortgage payments just to repay 50% of your original mortgage. Ouch!! For a friendly chat call 0800 236 678
 

Understanding The Value of Equity

Home equity is the difference between the market value of your home and the amount owing on any mortgages. In other words, your equity increases as your mortgage balance decreases or your home increases in value. If your home has been valued for $250,000.00 and you owe $125,000.00 on your mortgage, your equity is $125,000.00.


Traditionally people rely on the value of their home to increase which in turn does increase your equity. They then 'feel' rich... but it's a false wealth. Why? Because you can only realise this wealth when you sell. Some borrow against it and use the money for improvements to the home, education for their children, or for things like investments in business ventures or purchasing additional property.

But as property values have dropped sharply recently - and will continue to be up and down - this equity has quickly been eroded and in some cases it has resulted in homeowners with negative equity. 

The best option to increase your equity is by repaying your mortgage quicker and decrease the mortgage amount owing. Start today by calling 0800 236 678 now

A simple formula for determining your home equity is to subtract the amount of the mortgage balance from the current fair market value of your home. It's called your Loan to Value Ratio or LVR.

How to Get The Best Return on Your Home

So how do you get the best return on your hard earned money? You could invest your money in stocks, bonds and shares or invest in fixed rate investments. The problem with these is you could lose money, or the shares do not preform as well as you would reasonably expect. Ask the thousands of Kiwis that have lost money in the collapse of the, to date, 29 finance companies.

Thousands of people have invested in investment property schemes like Blue Chip and Merlot... and unfortunately that turned out to be a huge disaster, losing investors hundreds of thousands of dollars and, worse, paying for mortgages on properties worth far less than they originally paid for them.    
 
To be fair, investing in property is not a bad investment and like any investment you must weigh up the risks and potential returns. Many people have done very well in investment property because its all about timing; by that I mean time in the market, not the time of the market. The longer you retain your investment property the better return you will get over the years.

In addition, you get the benefits of off-setting your rental expenses against your taxable income. However, too often property investors still have significant mortgages on their personal homes, which they are unable to off-set against their taxable income.
      
Is there an investment out there that guarantees a return? Is nearly risk free, I believe there is...

You see, even with today's rollercoaster interest rates it's unlikely you'll get a better return in stocks, shares or fixed rates - at most these will return you an average 5% to 7% per annum on your money. Investing in your mortgage is a guaranteed return!

Let me explain. Saving 8% a year on your mortgage is equal to 11.94% a year pre-tax return on an investment. (tax rate 33%) In investing circles, that's an excellent return on investment. Plus, it's tax free! 
 
In addition, being debt-free obviously has an effect on your monthly cash flow and your psyche. Most people experience a dramatically increased sense of well-being and security when they eliminate all their debt. Want to know more call 0800 236 678 today

Your Biggest Challenge is... You

Do you know who the biggest challenge to your financial well-being may be? Yes, that's right... it's you!
If you take a ‘she'll be right mate’ attitude, you may find yourself deeply in debt, without any home equity to speak of and at the mercy of a bank mortgagee sale, or property "investors" ready to swoop in and cash-in on your financial distress. You can’t afford to do nothing! And there's no time like the present to begin your quest to pay off that mortgage.

Want some motivation? Start by reading the amortisation schedule of your mortgage (you'll receive one with your Be Mortgage Free Report). Once you see exactly how much of your monthly payment goes to interest, and what a tiny portion goes toward paying off the principal, you will realise that every extra dollar you pay reduces the portion of your payments that services your interest expense.

If you focus your efforts on the task at hand, you may be surprised at how quickly you can pay off your mortgage. With you being mortgage free, you will find that the comforts of home are even more pleasurable when it is you - not the bank - who owns your home. Only you can decide if it's better for you to prepay your mortgage. The best advice I can give you is to make an informed decision. Get all the facts first... then decide.

I have looked at the numbers, checked them and double checked them and I can tell you this is the smartest thing to do, that is, only if you want to save tens of thousands of dollars in interest payments and end up laughing all the way to the bank.

So what now? Firstly, in order to move forward you need to know where you are now... like finding your place on the financial map. If you don't know where you are, how can you get to your desired destination? The Be Mortgage Free Report is designed to give you the facts that you need to make an informed decision for YOU... it's tailored to you and gives you realistic goals on how to pay off your mortgage and become debt-free in record time. Don't wait, start today by calling 0800 236 678

Alternatively, you could hold on to your mortgage and continue to pay most of your money to somebody else for the next 30 years. The choice is yours.

What Are Your Goals and Dreams?

Imagine being totally debt free. No mortgage payments to make; no credit card payments or personal loans keeping you awake at night. Imagine having the cash to do the things you want to do with your family...

Overseas holidays at 5 star resorts - paid in cash. No worries about your children's university education - paid in cash. Increase your driving pleasure when you buy a new car - paid in cash. Give money to your favourite charity - paid in cash. Reduce the hours you are working... enjoy life. You only live once, so why not enjoy the fruits of your labour - worry free?

It will feel even better knowing that you’ve now got cash in your pocket and no longer is your hard-earned money going to the hands of the money lenders.

When it comes to mortgage interest, every day counts... literally! So order your Be Mortgage Free Report now. It's free and there's no obligation for you to do anything. Just pick up the phone and dial 0800 236 678

Once you receive your free report, you will see how your current mortgage repayment plan is taking more money out of your pocket than it needs to; I urge you to take control of your future by acting today!

And if you decide that you want to experience the benefits of this 'Be Mortgage Free System', then it’s important that you commit to take action immediately so that I can help you save tens of thousands of dollars and cut years off the length of your mortgage - starting now! 

That’s the good news.

But first...
 

Home Ownership

One of the biggest financial decisions people will make in their lifetime is to buy a home. In fact, it is the great Kiwi dream to own your own home. The sad reality is a mortgage loan is part-and-parcel of home ownership. You see, what you really want is the home, NOT the mortgage. Despite the tremendous financial burden of a mortgage loan, it is far better to buy than to rent, of course. Home ownership allows you to build equity in your property. Rental money just goes into the pockets of landlords.

The most obvious reason to pay off your mortgage as soon as possible is the peace of mind you gain from owning your home. Home ownership gives you and your family security and there's no landlord to sell your home from under your feet at the drop of a hat - no need to move house or put your children through the trauma of changing schools. The advantages of home ownership far outweigh renting in the short and long term, and the advantages get even better WHEN you apply the Be Mortgage Free System.

Interest Rates and Compound Interest

Interest. It's great when you get it, not so great when you have to pay it. And you’ll have to pay it for a long, long time if you’re carrying a traditional 30-year mortgage. For example, if you have a $250,000 mortgage at 8% a year, you'll spend over $410,388 in mortgage interest payments alone over the life of the loan (not including the principal). Combined, that's a massive $660,388. That's a lot of money in anyone's books.

Take the $250,000 mortgage example discussed above with the 8% per annum interest rate. What if the rate changes to 9% per annum or even 10%? A relatively modest interest increase from 8% pa to 9.25% pa, will cost you more than $490,000 in interest!

Now, with falling interest rates, there are opportunities to make enormous savings using the Be Mortgage Free System. Understanding compound interest and how you can make it work to your advantage, and not the lenders, is another critical part of becoming mortgage free. Need more information call 0800 236 678

Free yourself!

As a homeowner, understand that you do have control. You are not helpless and can do things to get you and your family closer to being mortgage free.

It’s also important to remember that home price appreciation should not be relied upon to eclipse the risks of mortgage debt. In other words, don’t count on a rise in the value of property to save you.

In a nutshell: Paying down mortgage debt reduces risk and can be to your economic advantage. The question is... when are you going to start your journey to be mortgage free? How about now? By phoning 0800 236 678

Interestingly, the word mortgage is derived from Old French, meaning 'death pledge'. MORT means death like mortuary and GAGE meaning pledge. In other words, you are pledged to your debt, till death do you part... and this will be true for many, many homeowners. Don't let it be true for you.
 

Debt As A Way of Life

Everyday on the TV we see advertising with 'interest free' this and 'interest free' that, enticing us to buy consumer goods now and pay later. These ads look like you're getting a bargain, but remember you're paying full retail for these items and by the time you have paid them off they are probably worth a fraction of what you paid for them.

Credit card transactions have trebled in number over the last 10 years and now account for around 23% of non-cash payments. At the end of 2007, credit card advances outstanding totalled $5.2 billion, while credit card billings for the year on New Zealand cards were $28.2 billion. A total of 2.5 million bank credit cards were on issue. Have you ever noticed that the bank increased your credit card limit without even asking you? Banks are there to lend money... the longer the better. That's how they make their billions of dollars in profits. And it's okay to be profitable... but don't make it at your expense.

Remember, debt is a road to nowhere; yet we spend on average more than we earn... we must change this way of thinking and understand how we can control the amount of debt we incur. Which brings us to my next point...
 

It's not How Much You Earn it's How Much You Keep.  

Managing money in the modern electronic age with eftpos and ATM's can be a daunting task and you can spend hours reviewing your bank statements. I mean, who still balances their cheque book? Most of us, no matter how much we earn, have no idea where our money goes. And we live from pay cheque to pay cheque.

What if you had a simple system that, with only a few minutes a week or month, can tell you exactly were your money is being spent. What if you also had a mentor to assist with this and provide ongoing support. We all need some fresh ideas and help sometimes. Remember, the definition of insanity is doing the same thing over and over and expecting a different result.

You need to make some changes... yes, BUT not huge changes, little changes can make a huge difference on your mortgage interest without impacting on your lifestyle.
 

So now what?

Ring us at Be Mortgage Free and have a mortgage mentor complete a no obligation report with you. There's no smoke and mirrors, no fancy jargon to confuse you. We will give you the facts and then you need to decide if being mortgage free is your goal and if your dream of a debt free life is what you really want.

You may be saying to yourself;  "I can't afford it?" The reality is, you cannot afford not to!

Call now on 0800 236 678 (0800 BE MORTGAGE FREE)      

 
Best wishes for a long debt free life,

Kim Lyons
Managing Director
Be Mortgage Free Limited

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Disclaimer
Articles provided are for information purposes only. It is not an offer to enter into any Be Mortgage Free Limited products or services. Accordingly, you should not take any action in reliance of this article without considering your particular circumstances and taking appropriate professional advice from your Accountant and / or Solicitor. No right of action shall arise against Be Mortgage Free Limited, its related companies or any of their respective directors, officers or employees either directly or indirectly as a result of the information contained in this article in particular, Be Mortgage Free Limited is not responsible for any mistakes, omissions or errors in the article or matters arising due to changes to the law, products or services over time.

 

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