Top 5 Questions
1. What makes the loan pay off sooner?
Answer
Direct-deposit of your income into this mortgage. It 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.
2. If I pay off early, will I lose my tax deduction?
Answer
Yes, and this is good. Because you will no longer have a mortgage. We believe that "interest is not in your best interest." Paying $3 in interest to get approximately $1 in tax deductions is not a good long-term strategy. The Home Ownership Accelerator 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 (see your tax advisor).
3. The loan is based on the LIBOR index.
Why is the margin slightly higher than other loans, and what if rates go up even higher?
Answer
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. The best way to observe this is to use the Interactive Simulator, which can be found at www.cmghome.com. You'll see why the slightly higher margin on this loan, which is required due to its highly transactional nature, can have such a minimal effect on the overall payoff timing.
4. What is the payment?
Answer
Again, we're changing the way mortgages work. Every time you make a direct deposit of your payroll, or add funds from another account, you're in effect making a payment. Then at the end of each monthly statement period, interest is charged based on your daily principal balance. We simply add it to your principal balance.
5. Who is the ideal customer for this loan?
Answer
The Home Ownership Accelerator is ideally suited for responsible homeowners with positive cash flow, who understand that parking their cash against their mortgage balance can earn them a much higher effective return than in a low-interest checking or savings account.
Equal Opportunity Lender