Hello! Thank you for downloading a copy of this informational E-Book on the All In One HELOC Strategy. Please allow me to introduce myself. My name is David Bruce and I am the owner of Aptus Lending in Hendersonville, TN. I have been educating my clients about available mortgage loan options and helping families buy and refinance homes since 1993. Throughout my career I have owned my own mortgage company, originated loans for and managed mortgage operations at two of the big national banks. Over the course of my career, I have transitioned from a being just a Loan Originator to a Mortgage Coach and a Mortgage Planning Specialist. As such, I strive to educate my clients about how to use advanced strategies to finance and refinance their homes, taking into account their full financial landscape including short, medium and long term financial goals. With careful planning, mortgage financing is the cornerstone of a successful financial plan. Without a plan, goals are seldom realized. In 2006 I learned about the revolutionary strategy I am introducing to you today. After I share with you the details of the program, you will have little doubt about how excited I was to incorporate it s use in my mortgage planning practice. It was about this time when my wife was in a very serious car accident. I was unable to devote my full attention to work for the next year. As she was recovering, the financial markets descended into ill health and finally melted down. My industry changed dramatically overnight and this loan strategy quickly went dormant in the mainstream. It did not go away entirely as only a few banks still offered it. At any rate, I no longer had access to the program. During the downturn I was so disgusted by the mortgage industry, I walked away from it. The housing market was in shambles because of the actions of the big greedy banks. Like so many
Americans affected by the economic collapse, supporting my family and ensuring my financial survival became my main concern. I was out of the industry but felt that something was missing. I realized very quickly that Mortgage Coaching was my passion. I missed the interaction with families and helping people achieve their goal of home ownership. Interest rates decreased and the real estate market rebounded so I jumped back into the industry. I opened Aptus Lending, LLC. As a brokerage firm I am in control of choosing my investors and the variety of loan programs I offer my clients. Finally, I was able to pick up where I left off in 2006. Once again, I have access to the most powerful home financing tool ever available. And, it has brought us together! So, let me show it to you in all its glory. From this day forward, let the word MORTGAGE be stricken from your vocabulary. I am dedicated to helping you understand every aspect of the ALL IN ONE HELOC STRATEGY. As we go along, please make note of any questions you have, we can come together to answer those anytime you like. Let s determine if this makes financial sense for you. Here we go! David Bruce Managing Member of Aptus Lending, LLC 131 Maple Row Blvd, Suite E-500 Hendersonville, TN 37075 615-334-0226 dbruce@aptuslending.com www.aptuslending.com NMLS# 158463/1387947
Table of Contents 1. 1 st Lien All In One Home Equity Line of Credit (HELOC ) 2. How is the All In One HELOC better than a Amortized Loan? 3. Case Study Benefits of REFINANCING into the All in One HELOC 4. All in One HELOC Underwriting and Eligibility Requirements 5. Your 5 Step Roadmap to Financial Freedom
Chapter 1 The All IN ONE 1 st Lien HELOC The All In One Account combines a 1 st Lien Open Ended Interest Only HELOC with a Checking Account. It s that simple! Line of Credit with 30 Year Draw Period Checking Account just like you have now: Checks Debit Card Auto Deposit Online Banking Auto Bill Pay Unlimited Transactions No Monthly or Annual Fees
This model has been used to finance homes in Australia, the UK and parts of Europe since the early 1990 s. First introduced to the U.S. in 2005 by an Australian Bank, this model is far superior to the Amortized Mortgage Program with which we are familiar in the United States. It was quietly growing in popularity until the Financial Meltdown. Afterwards, a few banks continued to offer it and the fortunate home owners who implemented this strategy have enjoyed its uninterrupted benefits. It has recently re-emerged as the best home financing option available in the U.S. but is still not available in all states.
Fortunately, it is available in Tennessee! The big banks that control the majority of the U.S. mortgage market are scared to promote this product. WHY?? The banks have billions invested in their Amortized Mortgage products and current business model. If they lose control of the amortized loan as the industry standard for home financing, they lose the interest and fee income, thereby changing their current business model significantly. It is also not in their best interest to willingly educate home owners and home buyers to quit using their checking and savings accounts. These deposit accounts are the lifeblood of their business and the banks need deposits to thrive.
This strategy is so powerful that the investor we use for this product will not allow their own loan officers in their retail division to offer this product for fear it would quickly become too popular of an option! I think it s safe to say that 99% of licensed mortgage professionals in the country do not even know the All In One Program exists. PROVEN STRATEGY The All In One HELOC delivers incredible benefits that just aren t possible with a traditional amortized mortgage. By taking control of your liquid assets, your CASH FLOW, to reduce interest expenses, it is possible to significantly accelerate principle reduction of your home loan. The All In One HELOC will help you build and protect wealth while providing you the liquidity and convenience of a line of credit.
This combination will allow you to pay off your home in half the time or less than a 30-year Amortized Mortgage without: increasing your income reducing expenses, or changing your spending! The line of credit calculates interest daily on the outstanding principle balance and requires an interest only monthly payment. In contrast, an amortized loan requires a principle and interest payment calculated by an amortization schedule. It is this principle of ending your requirement to agree to an Amortization Schedule that makes this strategy work. NO MORE AMORTIZATION!
By having the ability to pay interest only on the outstanding daily principle balance, you are able to combine the cash flow of your checking with liquid asset accounts. Doing so allows you to manage the outstanding daily balance on the line of credit to reduce interest expense and accelerate principle reduction, resulting in a much faster payoff. This is how large corporations and banks manage their debt. Now this strategy is available to you!! Consider this example: Company A has a $5,000,000 line of credit they use to finance their business. They keep $1,400,000 in their cash operating account they need for day to day operations.
In order to reduce their daily interest expense on their line of credit they transfer $1,400,000 of the cash from their operating account as a payment on the line of credit each night. Doing so reduces the daily balance on which the interest is calculated at midnight, thus avoiding interest on the $1,400,000 they transferred. In the morning, a standing agreement with the bank transfers the $1,400,000 right back into their operating account. Assuming a 4% rate on their line of credit, Company A just saved $153.42 in interest. This may not sound like very much, but when calculated over a year, the savings is nearly $56,000, putting Company A closer to reaching their financial goals. It s really that simple! What works for Company A can and will work for you, too!
The All In One HELOC is actually better because it already is combined with your checking account so there is no need to manage daily transfers. All you do is deposit your cash flow to reduce the daily balance and your interest expense reduction happens automatically, resulting in a much faster principle reduction and payoff. Once you fully understand this strategy and DO THE MATH, Amortized Mortgages and underperforming checking, savings, money market and CD accounts will immediately become obsolete! AMORTIZATION BENEFITS THE BANK AT YOUR EXPENSE!
In the simplest terms, here is how the All In One Account works! Formula: Deposit Cash Flow and Liquid Assets Reduce Average Daily Balance Reduce Daily Interest Expense Reduce Total Monthly Interest Expense Accelerate Principle Reduction Pay Home Off Faster Positive Cash Flow is the fuel that powers the engine. The more positive cash flow you have, the faster you will be able to reach a zero balance. You have heard the saying CASH IS KING. In this case POSITIVE CASH FLOW IS KING! It is what accelerates your interest savings and principle reduction.
The more POSITIVE CASH FLOW you deposit and leave in the account each month, the faster you will pay down the principle balance. AND It is a line of credit, so as you pay down the balance you have access to more funds. DECREASING BALANCE = INCREASING AVAILABLE FUNDS
Chapter 2: How is the All In One HELOC better than Monthly Payments a Amortized Loan? All In One HELOC Amortized Loan The monthly payment is calculated based on the average daily balance. Interest expenses are calculated based on the Amortization Schedule. Payment is interest only. It allows ability to manage daily balance to reduce interest expenses. Payment stays the same throughout the entire term of the loan regardless of the outstanding balance.
Principle Reduction All In One HELOC As deposits are made into the account, positive cash flow reduces the daily balance. Monthly interest due is reduced so that more positive cash flow is created to further reduce the balance. It is this dynamic that accelerates principle reduction and decreases the time required to pay off the loan. Amortized Loan The principle is reduced based on a predetermined payment schedule. This schedule dictates how interest is earned first and then the principle is only reduced as a secondary thought. It is designed to benefit the bank at your expense as it isn t until about year 17 that you even reach the point where a larger portion of your payment goes to principle instead of interest. The payment does not change and the balance decreases very slowly as most of the monthly payment is interest.
Liquidity All In One HELOC This is a Line of Credit and your checking account so the balance is a twoway street. The balance will decrease as you deposit money and increase as you spend money. As the balance goes down your access to available funds increases so that you always have access to your funds. You can access funds with your checkbook, debit card or transfer funds through its online banking features. Amortized Loan This is a fixed and rigid loan that is a one-way street. You can only put money into it. As the principle balance is reduced your money or equity is trapped. If you need access to funds you have to refinance or even sell your home to get access to your equity!
Home equity trapped in an amortized loan is DEAD MONEY that provides 0% rate of return and carries a significant lost opportunity cost due to fact that you can t use it for your financial benefit. Once this opportunity cost is lost, IT IS LOST FOREVER! Our Payoff Simulator will generate an approximate payoff date based upon different cash flow scenarios and variables specific to your financial situation. Do the MATH to determine your potential savings with this strategy. If we run your scenario in our calculator and it doesn t result in significantly faster payoff, there is only 1 possible conclusion: You are either wanting to buy a house that is too much for your income or you already own a home that is more than you can or should afford! Let s run your scenario and DO YOUR MATH to find out!
Chapter 3: Why you SHOULD REFINANCE your Existing AMORTIZED MORTGAGE into the All IN ONE 1 st Lien HELOC Immediately! Let s look at a REFINANCE Case Study to compare an All In One HELOC with a 30-year amortized loan. The same fundamental strategy applies when using the All In One Account to PURCHASE a home. Assumptions for this REFINANCE Case Study: Assumptions ALL IN ONE HELOC Credit Line $400,000 (80% of Home Value) Amortized 30 Year Mortgage N/A Difference Opening Balance $350,000 $350,000 NONE Available Liquid Funds $65,000 $0 $65,000 Interest Rate 4.126% 4.00%.126% Daily Interest Rate.0001144% N/A N/A Liquid Funds Deposited Positive Monthly Cash Flow $65,000 $0 $65,000 $1,750 N/A $1750
RESULTS Payment Month 1 ALL IN ONE HELOC $991.80 Interest Only Amortized 30 Year Mortgage $1670.95 Principle and Interest Difference $691.02 Month 1 Principle Reduction Month 1 Ending Balance Month 2 Cash Flow In Payment Month 2 Month 2 Principle Reduction Estimated Time to Payoff $66,700 (19.07% Principle Reduction) $504.28 $66,195.72 $283,250 $349,495.72 $66,245.72 $1,750 $0 $1,750 $990.63 $1670.95 $680.32 $1751.17 $505.96 $1245.21 Repeat until paid off 166 Months 13 Years 8 Months 30 Years 194 Months 16 years 4 Months Total Payments Paid at Payoff $117,734.33 $277,377.70 $159,643.37 Total interest Paid at Payoff $117,731.58 $165,814 $48,082.42 Total Principle Reduction at Payoff $350,000 $111,563.70 $238,463.30 Principle Balance at Payoff ZERO $238,436.30 $238,463.30 Available Line of Credit at Payoff $400,000 ZERO $400,000
So what Happened? 1.) The liquid funds that were sitting in underperforming deposit accounts were deposited into the line of credit to reduce balance. Putting this Lazy Money to work immediately reduced principle balance which reduced monthly interest expenses. The deposited funds are available to be drawn from line of credit at any time. (It is not a requirement to have funds to deposit immediately but when there is lazy money available it Turbo charges the early principle reduction and always makes sense.) 2.) The positive cash flow further reduced the principle balance and further reduced the monthly interest expense for month 2. In simple terms, this process is repeated until loan is paid off.
When we speak to RUN YOUR NUMBERS I will share the full calculations that show the full picture every month until payoff. Results, 1. When the All In One HELOC paid off the total interest paid was still $48,082 less than the interest paid on the amortized loan. 2. When the All In One HELOC paid off, the total payments were $159,643 less than the amortized loan. 3. When the All In One HELOC paid off, there was still a balance of $238,436 owed on the amortized loan. 4. When the All In One HELOC paid off, the amortized loan still had 194 payments. 5. When the All In One HELOC paid off, the amortized loan has no available funds, while the HELOC has $400,000 available.
PUT YOUR LAZY MONEY TO WORK! This example had $65,000 lazy money sitting in underperforming deposit accounts. Why keep money liquid if it is not going to work for you? Below are the national averages of various deposits accounts. If you transfer the balances of these accounts into your All In One HELOC, you immediately put this money to work for you earning bigger returns and reducing interest so you pay-off your home faster. National averages Checking.86% Savings.06% Money Market.09% CD- 12month.21% Earnings on an All In One Account current interest rate of 4.126% This 78 times higher than Checking This is 654 times more than Savings This 436 times more than Money Market This is 187 times more than CD rates
Chapter 4: All In One HELOC Underwriting Requirements and Eligibility As with any loan option, there are guidelines and qualifications that must be met for eligibility. Guidelines: Primary and Second Homes Only Minimum Credit Score: 700 Maximum Debt Ratio: 40% Reserves: 10% of Line of Credit Amount Full Income Documentation: 2-years tax returns self employed Eligible Borrowers: US Citizens, Perm. Resident Aliens, Inter-Vivos Revocable Trusts Minimum Line Amount: $100,000 Maximum Line Amount: $1,500,000 Maximum initial Draw 99% of Line Amount Property Types SFR, 1-4 Family Appraisals: 1 up to $1,000,000 2- over $1,000,000 (lower value of 2 used)
Trade lines: 4 trades with 24-month history, min 1 trade reported last 6 months Bankruptcy: None in past 7 years Foreclosure: None in past 7 years Short Sales: None in past 7 years Mortgage Lates: None in past 12 months Outstanding Liens: Must be paid at closing Outstanding Judgements and Charge-Offs: Must be paid at closing Purchase: 80% LTV $100,000 - $750,000 75% LTV $750,001 -$1,500,000 Refinance : Rate and Term -Same as Purchase Defined as paying off 1 st and/or 2nd liens Refinance Cash Out: 75% LTV $100,000 - $750,000 70% LTV $750,001 -$1,500,000 These guidelines are very rigid with little room for exception so if you see an issue with specific item above please contact me to discuss as we may be able to determine what needs to be done so that you may qualify. If you believe your credit score is below a 700, please contact me today as I have access to Rapid Rescore options that may be able to help us quickly improve your score.
Below is the list of items you will need to gather so we can run a true simulation of what is possible for you. Refinance Current Amortized Mortgage: Balance Interest rate Assets balances: Checking balance Savings balance Money market balance CD balances Cash flow: Estimated NET income you deposit on a monthly basis Total of all money you spend each month We can run simulator with estimated % of positive cash flow until fully we evaluate your budget.
Purchase: New Home Purchase price (Contract) Amount of Down Payment Assets balances: Equity Pending from Sale of Home Checking balance Savings balance Money market balance CD balances Cash flow: Estimated net income you deposit on a monthly basis Total of all money you spend each month We can run simulator with estimated % of positive cash flow
Chapter 5: Your Five Step Road Map to Financial Freedom 1. Education- You have already taken this first step in downloading and reading this informational book. Congratulations! Let s get on to the next step! 2. Exploration- Every person has a different financial picture. We would like to focus in on one aspect of yours. The linchpin which gives the All In One Program its power is CASH FLOW and liquid assets! The next step is to run your numbers. Together we will determine what this program can do for you.
3. Evaluation- Educated with knowledge about the All In One Program and having explored the route you will take along your travels on the road to financial freedom, you must decide if it is a trip you would like to make. The numbers don t lie and you have the map. If you are ready to set out, let s get going! 4. Execution- It is said the hardest part of any journey is the first step. Let s make it together and then let us take care of everything else. Getting an All in One Account is much like getting a mortgage. In fact, it is underwritten using the same process as a conventional mortgage. The paperwork and documentation are virtually identical. 5. Enjoyment- What is not to enjoy about taking back control of your money from the bank, saving a boat load of cash and paying your home off in half or less time than a traditional mortgage?
It is time to pull out the payoff simulator so we can get a projection of interest savings and how fast you can pay off your home. 15 minutes can change your financial future as the ability to pay off your home faster is just the first step. The real power is what you are able to do with the savings to build generational wealth for your family. Contact us TODAY to DO YOUR MATH! David Bruce Managing Member of Aptus Lending, LLC 131 Maple Row Blvd, Suite E-500 Hendersonville, TN 37075 615-334-0226 dbruce@aptuslending.com www.aptuslending.com NMLS# 158463/1387947