1 Our Loan Planner The Browner Group.com 1.888.531.0958

1Our Loan Planner

The Browner Group.com

1.888.531.0958

2

1. Federal Reserve Board, Consumer Credit Report, May 2003.2. Sources: Bankrate.com and cardweb.com, February 2004.3. Source: neway.org, May 2002.

Building a secure financial future is not as easy as it used to be.

Most people fail to realize the devastating impact this has on their financial future.

It’s no wonder personal bankruptcies are at an all-time high.3

There has to be a better way.

• In 2003, consumer debt in the U.S. surpassed $1.7 trillion. Credit cards account for almost half of that debt.1

• Last year, the average household had 10 credit cards with an average combined balance of $8,500. The average interest rate was 13.4%.2

• If your credit card balance is $8,500, and you make the minimum monthly payment at 14% interest, it will take you6 years and 3 months to pay off the debt, provided you do not use the cards again.2

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The Rules Have Changed

Fact:Since you need to borrow money during the course of your lifetime...

Doesn’t it make sense to borrow the money as inexpensively as possible?

You should avoid high-interest, non-deductible debt such as credit cards, auto loans and personal loans. Instead, choose the better way.

Use Your Mortgageto Create Wealth

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Learn How To Use Your Mortgage To Create Wealth

The Old Way of Thinking:• First, get the lowest-rate mortgage...

• Then, start a bi-weekly mortgage program...

• And, send in additional money whenever possible to reduce the principal balance...

ALL so you can pay off the mortgage as soon as possible.This Depression Era mindset has been burned into the American psyche.

But, is it possible this is exactly what you should NOT be doing?

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“ You should get a big mortgage and NEVER pay it off. ”

– Ric EdelmanNew York Times Best-Selling Author of The New Rules Of Money

1 Interest rates subject to change. The above hypothetical examples are for illustrative purposes only.

The New Rules of Money

The rules have changed. Now... • Choose the best mortgage, not necessarily the

one with the lowest rate.• Stay away from bi-weekly mortgage plans.• Never send extra money to your mortgage company. • Paying off your loan is like putting money under your mattress.

Your goal is to make the smallest payment with the biggest tax-break possible. That means never paying off your mortgage.

To understand why, discover The Truth About Money.

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The Truth About Money“ Here are 5 great reasons to carry a big,

long mortgage and never pay it off. ”

Reason #1: Mortgages don’t lower home values.Your house will grow in value (or not) whether or not you have a mortgage. In fact, most people discover that, over time, their mortgage balance falls while their home value rises – creating substantial wealth they never expected.

– Ric EdelmanAuthor of the acclaimed Best-Seller, The Truth About Money, 1997 “Book of the Year”

1 Interest rates subject to change. The above hypothetical examples are for illustrative purposes only.

The rules of money have changed.And nowhere is that more true than with mortgages.

Reason #2: Your mortgage is the cheapest money you’ll ever buy.Most people need to borrow money during their lives, so why pay 18% to credit cards when you can borrow at rates of 7% or even less?

Reason #3: Your mortgage is the best way you can lower your taxes.Interest you pay on personal loans, auto loans and credit cards is not tax-deductible, but for most of us, interest you pay on mortgage loans is fully tax-deductible, making the cheapest loan you’ll ever get, even cheaper. Imagine borrowing money for a net cost of just 5%!1 You can do it with a mortgage loan!

Reason #4: Get the cash out of the house — while you still can.The main reason people turn to borrowing is because they have little or no income. But if you ever suffer a job loss, major medical or other financial crisis, you could find yourself unable to get a home loan. That’s because lenders don’t like to lend money if you are already in financial difficulty. That’s why you should get a big mortgage now, before you need it — and while you still can.

Reason #5: Your mortgage becomes even cheaper over time.Depending on the loan you choose, your payment never rises — but your income likely will. That means today’s mortgage payment becomes increasingly easy to pay over time!

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“A Tale of Two Brothers”Adapted from the book, The New Rules of Money

Our story begins with two brothers, each earning $70,000 a year. They each have $40,000 in savings and both are buying $200,000 homes. Brother “A”

Believes in “The Old Way” – paying off the mortgage as soon as possible

Brother “B”Believes in “The New Way” – carrying a big, long mortgage and never paying it

off

Who made the right decision?

• $40,000 big down payment• $0 left to invest• $1,275 monthly payment

(56% is tax deductible first year/28% average)• $1,153 average monthly net after-tax cost2

• Sends $100 monthly to lender in effort to eliminate mortgage sooner

• $10,000 small down payment• $30,000 remaining to invest• $967 monthly payment

(100% is tax-deductible first 15 years/59% average)• $657 monthly net after-tax cost3

• Adds $100 monthly to investments, plus $496 saved from lower mortgage payment, where account earns 8% rate of return4

• 15-year mortgage at 5.12% (5.44% APR) • 30-year interest-only loan at 6.11% (6.29% APR1)

The above hypothetical examples are for illustrative purposes only. Plans vary based on the needs and wants of the customer. Illustrated interestrates compiled by Freddie Mac for April 2003.1 This example is based on a Fannie Mae Interest First loan fixed at6.11% APR. Interest only for 15 years, then the first loan converts to a 15-year

amortizing loan on the 15th anniversary with a mo. payment of $1,753.2 Assumes combined federal/state income tax rate of 32%.3 Assumes combined federal/state income tax rate of 32%. Net after-tax cost shown is for years 1-15; average for years 16-30 is $1,470.4 Assumes 8% rate of return. Rate of return may vary based on type of investment.

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The above hypothetical examples are for illustrative purposes only. Plans vary based on the needs and wants of the customer.1 Assumes combined federal/state income tax rate of 32%.2 Assumes 8% rate of return. Rate of return may vary based on type of investment.

• Received $11,286 in tax savings1 • Received $18,574 in tax savings1

What if both brothers suddenly lose their jobs?

• Has no savings to get through crisis • Has $88,428 in savings to tide him over2

How ironic: Brother “A”, who never wanted a mortgage in the first place, is now in financial jeopardy because he was trying to get rid of his loan too quickly!

Brother “A”Believes in “The Old Way” – paying off

the mortgage as soon as possible


off

Results After Just 5 Years

• Has $0 in savings and investments2 • Has $88,428 in savings and investments2

• Can’t get a loan–even though he has $87,247 more in equity than his brother – because he has no job

• Must sell his home or face foreclosure because he can’t make payments

• At this point, it’s a fire sale, so he must sell at a discount, then pay real estate commissions (6-7%)

• Doesn’t need a loan

• Can easily make his mortgage payment even if he’s unemployed for years

• Has no reason to panic since he’s still in control — remember … Cash is King!

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Now...which do you think is the right course of action – “the old way” or “the new way”? Remember...Cash is King – and Brother “B” now has more than $1.2 million in savings and investments!

Brother “A”Believes in “The Old Way” – paying off

the mortgage as soon as possible


off• Received $19,702 in tax savings1 • Received $55,723 in tax savings1

• Received $19,702 in tax savings1 • Received $87,927 in tax savings1

• Has $27,592 in savings and investments2

• Owns home outright• Has $305,154 in savings and investments2

• Remaining mortgage balance is $190,000 – and he has enough savings to pay it off and still have $115,154 left over, free and clear.

• Has $567,148 in savings and investments2

• Owns home outright• Has $1,215,069 in savings and investments2

• Owns home outright – so starts fresh and enjoys the same benefits once again.


The above hypothetical examples are for illustrative purposes only. Plans vary based on the needs and wants of the customer.1 Assumed combined federal/state income tax rate of 32%.2 Assumes 8% rate of return. Rate of return may vary based on type of investment.

Results After 15 Years

Brother “A” Brother “B”Results After 30 Years

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The Moral Of Our Story• “The Old Way of Thinking” can be devastating to

your financial future.

People who understand how money works choose to carry a big, long mortgage and never pay it off.

• You should never send any extra money to your mortgage company. Instead, put that money to work for you.

• Once you have all the facts, it’s easy to make the right decision.

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Use Your Mortgage to Create Wealth

No matter what your approach, our extensive mortgage portfolio can help you.• Traditional mortgage products —

including fixed-rate loans (15-, 20- & 30-year terms), ARM loans (3-, 5- & 7-year terms), balloon loans (5/25 and 7/23 terms), second mortgages and home equity loans.

• Interest-only loans — products that allow you to pay just the interest each month, maximizing your tax benefits and freeing up more money to save or spend.

• The Pay Option Loan concept — an ARM loan that allows you to choose from four payment options each month, giving you maximum flexibility and control.

Global Mortgage Inc. cutting-edge mortgage analysis and application process makes finding the right product for you simple, quick and easy.

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Buy the Right Kind of Mortgage

Traditional 30-Year Loan

$1,149Mortgage Payment*

AdjustableRate Loan

$983Mortgage Payment**

Choose One of the Above

$200,000 Mortgage

* This example illustrates the monthly payment for a $200,000 loan with an APR of 5.61% amortized over 30 years. Payments include principal plus interest.

**This example illustrates the initial monthly payment for a $200,000 adjustable rate loan with a fixed APR of 4.25% for five years. APR and payment amounts adjust each year thereafter based on an index and margin and may increase. The current index is 1.37%. Projected composite APR over the 30-year life of the loan is 4.413%.

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1 This example illustrates the monthly payment for a $200,000 loan with an APR of 5.61% amortized over 30 years. Payments include principal plus interest.2 This example illustrates the initial monthly payment for a $200,000 loan with a payment based on an effective first year interest rate of 1.58%. The interest rate is 1.95% in the first month, interest plus

margin thereafter. Payment remains fixed for the first 12 months. This option may result in deferred interest which is added to your principal loan balance. Interest rate adjusts monthly based on an index and margin and may increase. Minimum payment adjusts annually up to a maximum of 1.075% of the previous year’s minimum payment. Projected composite APR over life of loan is 3.438%, based on initial interest rate, current index, and margin. APR may vary. The current index is 1.37%. Loan To Value Ratio of 80% or less.

3 Each example assumes that the option presented is selected each month of the loan term. For more details concerning the Power Option Loan concept and products available in your area, consult with your local Global Equity Lending representative. See back cover for additional disclosures.

4 These examples illustrate the initial monthly payment for a $200,000 loan with an APR of 3.375% at closing. APR and payment are subject to change each month based on changes in an index and your loan balance and may increase. APR may vary. Payments under Options Three and Four include principal and interest.

Traditional Loan(30-year Fixed-Rate)

$1,149Mortgage Payment1

Power Option Loan(Option ARM)

$698Mortgage Payment2

Choose One of the AboveThe Pay Option Loan concept lets you choose from four options each month:3

$200,000 Mortgage

Payment based on an introductory start rate for the first 12 months.

Option One: | $698 month2

Payment based on a fully-amortized 30-year loan.

Option Three: | $884 month4

Interest-only payment set up on a 30-year schedule.

Option Two: | $562 month4

Payment based on a fully-amortized 15-year loan.

Option Four: | $1,418 month4

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What would you do differently if you had the option to lower your monthly mortgage payment? Would you...• Pay off high interest rate debt?• Save more for your retirement years?• Prepare for your children’s education? • Plan a family vacation? • Prepare for a financial emergency —

loss of job, major medical expenses?

With our diversified mortgage portfolio, the choice is yours.

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What the experts are saying…

“Carrying a mortgage doesn’t cause you to lose any money at all. In fact, just the opposite is true: carrying a mortgage is actually quite profitable. It’s eliminating the mortgage that forces you to give up profitable opportunities.”

“If you have a mortgage and you’re dreaming of the day when you make your final payment, you’re trying to do something that financially successful people do not do.”

Discover how to turn your morgage into a wealth-enhancing tool.

Rita and Ferris BrownerOur Loan PlannersThe Browner Group.com1.888.531.0958

Documents

1 Our Loan Planner The Browner Group.com 1.888.531.0958