Can we really own our homes in less than thirty years?

The quick answer is no, unless you want to drastically change your spending habits, making extra payments that you can’t get back, not being able to invest when the opportunity is right. It’s a big decision. Or, you can make the decision to switch from a traditional mortgage into an accelerated mortgage.

This innovative and powerful loan uses the power of your income to slash thousands off the total interest you pay and chop years off the time it takes to pay off. All without changing your spending habits, or your access to the cash you earn.

Here is what others are saying….
“….harnesses the money sitting in a checking account for the borrower’s benefit instead of the bank’s.” — San Francisco Business Times,6/10/05

“….designed to help borrowers accelerate their principal payments as painlessly as possible.” — San Francisco Chronicle,5/26/05

“….a one-of-a-kind tonic for people who want to keep their balance sheets healthy in a time of skyrocketing house prices….” — Contra Costa Times,6/10/05

“….could revolutionize the way Americans pay for their homes….” — East Bay Business Times,6/10/05

How it works.

Bank your money in your mortgage.

With the Home Ownership Accelerator, you direct-deposit your entire paycheck into your mortgage, instead of your checking account. This immediately reduces your principal balance. Since interest is based on your daily balance, you start saving interest immediately compared to traditional loans! Access your funds just like you used to. You pay all of your expenses out of your mortgage, just like you would with a traditional bank account — using the unlimited checks, free ATM/Debit card, and free online bill-pay that comes with the account. Until you need the money, though, it’s in your mortgage in the form of a lower principal balance, saving you 5-6% in mortgage interest, instead of earning 1% in a bank account. Less interest means that more of your take-home pay goes towards principal, and you pay off sooner. With no change to spending habits!If you haven’t already, watch The Movie: How it Worksto find out why this loan is so powerful.

How effective is it?

If you’re an average borrower with good cash flow, you could pay off an average sized loan in as little as half the time – with no changes to spending habits.
Let’s look at an example: Imagine you have net pay of $100,000 annually, saving 15% of your net income after expenses, and you have a $400,000 30-year fixed-rate mortgage at 5.5%. And, let’s even assume that mortgage interest rates are climbing on a “reverse course” that mirrors their recent decline (APR 8.19%)! A ‘worst case’ rate scenario!” In this example, refinancing to the Home Ownership Accelerator roughly doubles your mortgage efficiency. You could pay off in as little as 17.3 years and save nearly $89,000 (21%) in interest, compared to the 30-year fixed rate loan at 5.5%. In fact, to save that much interest, you’d have to find a 30-year mortgage at 4.4%, which is very unlikely. But what if rates go up even more? In this example, the adjustable rate on the Home Ownership Accelerator would have to average 9.6% over the entire 17.3 years for the interest payments to equal that of the 30-year fixed rate mortgage at 5.5%. That’s not likely to happen either. Seeing is believing. Try it for yourself. Use our powerful Interactive Simulator and see how the Home Ownership Accelerator can help you achieve financial freedom sooner.

Still have questions?

See the answers to Frequently Asked Questions that customers often have.

Specifications:
Loan type: Adjustable rate line of credit, based on 1-month LIBOR index.
Adjustment period:
monthlyTerm: 30 years
Lifetime cap: 5% over start rate
Minimum credit line: $100,000
Maximum credit line: $2,500,000
Minimum down payment: as low as 10%
Minimum credit scores : 680 (excellent credit)
Withdrawals: ATM/Visa P.O.S. card with 8 surcharge-free ATM transactions per month at any ATM, checks, bill-pay, ACH, EFT.
Payments: Direct payroll deposit (required), EFT, ACH,Bank by mail.
Statements: Monthly.
Online account access.

Axis Real Estate
- 5380 Clairmont Mesa Blvd. #204
- San Diego, CA 92117
Office Phone: (858) 503-0113
Fax: (858) 503-0120
Toll Free Phone: (888) 503-0113
Toll Free Fax: (866) 830-5522

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Should I refinance?

The most common reason for refinancing is to save money. Saving money through refinancing can be achieved in two ways:

1. By obtaining a lower interest rate that causes one’s monthly mortgage payment to be reduced.
2. By reducing the term of the loan, thus saving money over the life of the loan. For example, refinancing from a 30-year loan to a 15-year loan might result in higher monthly payments, but the total interest paid durring the life of the loan can be reduced significantly.

People also refinance to convert their adjustable loan to a fixed loan. The main reason for doing this is to obtain the stability and the security of a fixed loan. Fixed loans are very popular when interest rates are low, whereas adjustable loans tend to be more popular when rates are higher. When rates are low, homeowners refinance to lock in low rates. When rates are high, homeowners prefer adjustable loans to obtain lower payments.

A third reason why homeowners refinance is to consolidate debts and replace high-rate loans with a low-rate mortgage. The loans being consolidated may include second mortgages, credit lines, student loans, credit cards, etc. In many cases, debt consolidation results in tax savings, since consumer loans are not tax deductible, while a mortgage loan is usually tax deductible.

The answer to the question, “Should I refinance?” is a complex one, since every situation is different and no two homeowners are in the exact same situation. The conventional wisdom of refinancing only when you can save 2 percent on your rate is problematic. If you are refinancing to lower your monthly payments, the following calculation is more appropriate compared to the 2 percent rule:

1. Calculate the total cost of the refinance–example: $2,000
2. Calculate the monthly savings–example: $100/month
3. Divide the result in 1 by the result in 2–in this case 2000/100 = 20 months. This shows the break-even time period. If you plan to live in the home for longer than this period of time, it likely makes sense to refinance.

Sometimes, you do not have a choice–you are forced to refinance. This happens when you have a loan with a balloon payment and no conversion option. In this case it is best to refinance a few months before the balloon payment is due.

Whatever you’re considering, consulting with a seasoned mortgage professional can often save you time and money. Make a few phone calls, check out a few web sites, crunch on a few calculators and spend some time to understand your options.

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Don’t make a mistake when Refinancing your home

1. Refinancing with your existing lender without shopping around. Your existing lender may not have the best rates and programs. There is a general misconception that it is easier to work with your current lender. In most cases, your current lender will require the same documentation as other companies. This is because most loans are sold on the secondary market and have to be approved independently. Even if you have made all your mortgage payments on time, your existing lender will still have to verify assets, liabilities, employment, etc. all over again.
2. Not doing a break-even analysis. Determine the total cost of the transaction, then calculate how much you will save every month. Divide the total cost by the monthly savings to find the number of months you will have to stay in the property to break even. E.g., if your transaction costs $2000 and you save $50/month, you break even in 2000/50 = 40 months. In this case you’d refinance if you planned to stay in your home for at least 40 months.Note: This is a simplified break-even analysis. If you are considering switching from an adjustable to a fixed loan, or from a 30-year loan to a 15-year loan, the analysis becomes more complex.
3. Not getting a written Good Faith Estimate of closing costs. See item number four above.
4. Paying for an appraisal when you think your home value may be too low. Have the appraisal company provide a list of comparable sales (typically at no charge) to provide you with a range of possible values. Your mortgage company’s appraiser or your Realtor may do this for you. Do not waste your money on a full appraisal if you are doubtful about the value of your home.
5. Using the county tax-assessor’s value as the market value of your home. Mortgage companies do not use the county tax-assessor’s value to determine whether they will make the loan. They use a market-value appraisal which may be very different from the assessed value.
6. Signing your loan documents without reviewing them. See item number nine above.
7. Not providing documents to your mortgage company in a timely manner. When your mortgage company asks you for additional documents, provide them immediately. They are doing what’s necessary to get your loan approved and closed. Delays in providing documents can be costly.
8. Not getting a rate lock in writing. When a mortgage company tells you they have locked your rate, get a written statement which includes the interest rate, the length of the rate lock and details about the program.
9. Pulling cash out of your credit line before you refinance your first mortgage. Many lenders have cash-out seasoning requirements. This means that if you pull cash out of your credit line for anything other than home improvements, they will consider the refinance to be a cash-out transaction. This usually results in stricter requirements and in some cases can break the deal!
10. Getting a second mortgage before you refinance your first mortgage. Many mortgage companies look at the combined loan amounts (i.e., the first loan plus the second) when refinancing the first mortgage. If you plan on refinancing your first loan, check with your mortgage company to find out if getting a second will cause your refinance transaction to be turned down. There are many programs where you can apply for both a first and second at the same time.

What mistakes are commonly made when buying or refinancing a home?

If you’re like most people, purchasing a home is the biggest investment you’ll ever make. If you’re considering buying a home, you’re likely aware of the complexity of the endeavor. Because of the numerous factors to consider when purchasing a home, it’s important to prepare as best you can. Some common home-buying principles and caveats are presented here for your consideration. By keeping them in mind, you’ll help create a successful and more enjoyable experience. The information contained herein is presented as a primer. Since your home could cost you 25 to 40 percent of your gross income, it’s important to conduct research, ask questions and study the process carefully.

Buying a home

1. Looking for a home before being pre-approved. As a potential buyer competing for a home, you’ll have a better chance of getting your offer accepted by being as prepared as possible. Consider this hierarchy of buyer preparedness:
   Offers are submitted and -
   • The buyer is not pre-qualified or pre-approved
   • Buyer is Pre-qualified
   • Buyer is Pre-approved

   The benefits available at each level can be easily understood when viewed from the seller’s perspective. Imagine you’re a seller in receipt of multiple purchase offers. A complete stranger (buyer) is asking you to take your property off the market for at least the next two to three weeks while they apply for a loan. As the seller, lets consider the type of buyer you’d prefer to deal with.

   Neither pre-qualified nor pre-approved

   This buyer provides no evidence that they can afford to purchase your property. You may wonder how serious they are since they’re not at least pre-qualified.

   Pre-qualified

   This buyer has met with a mortgage broker (or lender) and discussed their situation. The buyer has informed the broker regarding their income, expenses, assets and liabilities. The broker may also have seen their credit report. The buyer provided you with a letter from the broker stating an opinion of what the buyer can afford.

   Pre-approved

   This buyer has completed a loan application, provided a broker or lender with written evidence of income, expenses, assets, liabilities and credit. All information has been verified by a lender. As a result, much of the paperwork for this buyer’s loan has been completed. This buyer will probably be able to close quickly. They provide you with a letter (pre-approval certificate) from the lender. You’re as certain as possible that this buyer can close.

   As a potential buyer, you can see that being pre-approved will give you the best chance of getting your offer accepted. This is critical in a competitive situation.

2. Making verbal agreements. If you’re asked to sign a document containing instructions contrary to your verbal agreements–don’t! For example, the seller verbally agrees to include the washing machine in the sale, but the written purchase contract excludes it. The written contract will override the verbal contract. Do not expect oral agreements to be enforceable.
3. Choosing a lender because they have the lowest rate. While the rate is important, consider the total cost of your loan including the APR , loan fees, discount and origination points. When receiving a quote from a lender or broker, insist that the discount points (charged by the lender to reduce the interest rate) be distinguished from origination points (charged for services rendered in originating the loan). A below market or low interest rate quote may indicate some hidden loan requirements, like a prepayment penalty, requirement for escrow impounds, a short 15 day rate lock or requiring a bigger down payment. Make sure the rate quoted is for your specific loan request.The cost of the mortgage, however, shouldn’t be your only criterion. Select a reputable company which will deliver the loan as promised. Insist on a written pre-approval from the lender. If in the final hours of the transaction you find that the lender has suddenly increased their profit margin at your expense, you won’t have time to start again with a different lender. Ask family and friends for referrals, and interview several prospective mortgage companies.
4. Not receiving a Good Faith Estimate (GFE). Within three business days after the broker or lender receives your loan application, you must receive a written statement of fees associated with the transaction. This is both the law and the best way to determine what you’ll pay for your loan. Bring the GFE with you when you sign loan documents. You should not be expected to pay fees which are substantially different from those contained in your GFE.
5. Not getting a rate lock in writing. When a mortgage company tells you they have locked your rate, get a written statement detailing the interest rate, the length of the rate lock, and program details.
6. Using a dual agent–i.e., an agent who represents the buyer and the seller in the same transaction. Buyers and sellers have opposing interests. Sellers want to receive the highest price, buyers want to pay the lowest price. In the standard real estate transaction, the seller pays the real estate commission. When an agent represents both buyer and seller, the agent can tend to negotiate more vigorously on behalf of the seller. As a buyer, you’re better off having an agent representing you exclusively. The only time you should consider a dual agent is when you get a price break. In that case, proceed cautiously and do your homework!
7. Buying a home without professional inspections. Unless you’re buying a new home with warranties on most equipment, consider obtaining property, roof, structural and pest control and other relevant inspections. This way you’ll know what you are buying. Inspection reports are great negotiating tools when asking the seller to make needed repairs. When a professional inspector recommends that certain repairs be done, the seller is more likely to agree to do them.If the seller agrees to make repairs, have your inspector verify that they are done prior to close of escrow. Do not assume that everything was done as promised.
8. Not shopping for home insurance until you are ready to close. Start shopping for insurance as soon as you have an accepted offer. Many buyers wait until the last minute to get insurance and do not have time to shop around.
9. Signing documents without reading them. Whenever possible, review in advance the documents you’ll be signing. (Even though some specifics of your transaction may not be known early in the transaction, the documents you’ll sign are standard forms and are available for review.) It’s unlikely that you’ll have sufficient time to read all the documents during the closing appointment.
10. Not allowing for delays in the transaction. Ideally, all real estate transactions would close on time. In reality, transactions are often delayed a week or more. Suppose you asked your landlord to terminate your lease the day your purchase transaction was scheduled to close. A day or two before your scheduled closing date, you learn that your transaction is delayed a week. Very likely your landlord is inconvenienced and angry. The eviction process takes a little time, so the Sheriff won’t immediately remove you, but this type of stress-producing episode can be avoided. How? Terminate your lease one week after your real estate transaction is scheduled to close. That way, if there is a delay in closing your transaction, you have some leeway.

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