New Year Financial Resolution

Get your mortgage in shape!

Your 2008 Resolutions

• Pay down your mortgage as soon as possible

• Buy a new home, second home or investment property

• Get your credit score in shape

Shall I Pay Down My Mortgage?

• What do most people do when they want to pay down their mortgage?– They make additional payments to pay it off

faster.

But is it a wise decision?

Shall I Pay Down My Mortgage?

• Tax Bracket: 33%• Long-Term Capital Gain: 15%• Loan amount: $500,000 @ 6%

– After Tax Rate: 6% - 33% = 4%• Investment opportunity: 8%

– After Tax Rate: 8% - 15% = 6.8%

Disclaimer: Please consult with your Tax Advisor.

Shall I Pay Down My Mortgage!

• You have an extra $500 per month for the next 10 years and you have two choices:– #1: Pay down your mortgage– #2: Invest

What is your choice?

Do Not Pay Down Your Mortgage!

• After 10 years…– With option #1, you saved $13,625– With option #2, you earned $111,412

Who made the right choice?

Do Not Pay Down Your Mortgage!

• With Option #2, you have:– Minimize your taxes (33% vs. 15%). Long-Term

Capital Gain is taxed at a lower rate than regular income.

– You keep your cash! Cash is king!– You have a net gain of $97,787– Ok, you have still a mortgage…but you can still pay it

off!

mortgage financing is cheap..but use it wisely

Get In A “Home Buying” Shape!

• If you buy a new property, you should:– Put the lowest down payment as possible and

leverage the bank money, not yours!– Keep your cash and invest it!– Keep emergency funds in case of job loss,

health and other unexpected issues

Get In A “Home Buying” Shape!

• If you buy a property and you should work with a professional who can:– Optimize your credit history even if you think it

is perfect!– Advice you on top secret strategies (most

business credits cards are not reported on your credit history)

– Optimize your borrowing ability to get the financing solution that is right for you!

The Difference is the Advice

• The secret of the industry is that money is… UBIQUITOUS.

• However great down-to-earth advice is NOT.

• As I a Certified Mortgage Planner (CMPS), I strive to provide with the best advice for your financing situation.

Who Is A Good Referral?

• Great people…– who care for service– who care for advice– who want to establish a long-term

relation with a professional

Great people…like you!