The world is changing too fast but sometimes the change can be very beneficial to the consumer.
What if you had a mortgage with a bank and at that same bank you had your liquid savings. Your saving are just sitting there, separate from your retirement and long term investments, and earning you, what savings, CDs, etc. are earning today – one to two percent. The mortgage though is costing you only 4.25 percent. They probably told you that you were getting that great rate for your mortgage because you were a good bank customer. This issue though is that you are getting a return of 1 to 2 percent on the money that they are now (along with other depositor’s funds) charging you 4.25 percent for your debt. We all realize banks are in business and need to make a profit but does this seem right to you?
I have a better idea – what if we gave you a credit for the saving deposit against your mortgage balance and only charged you interest on the net balance. On top of that, what if we charged you interest daily instead of once a month allowing to have changes in your cash account reflect right away instead of averaged over the month. What if we also allowed you to use your paycheck deposit to offset the mortgage balance each day throughout the month to save you more interest. What if I further advised you that with this simple mathematical process (there is no magic here), you could pay off your mortgage in possibly half the time with little if any change in your spending habits.
If you would like to know more, give me a call 925-426-8383 ext. 26 – ask for David Walden
