Turn That Fixed Rate Mortgage Into A Goldmine

When you purchased your home, you most likely got a fixed interest rate mortgage with a 15 or 30 year term. These are the most popular mortgages in the industry. Even in the summer of 2004, when the interest-only or simple interest mortgage loans became popular, the average American stuck to the fixed rate. You see, the fixed rate offers security to conservative people, and the average American home buyer and home owner is a very conservative person.

Today, it's time to ignore that conservative nature and throw out that fixed rate mortgage. If you have a home, no matter when you purchased or refinanced your mortgage, you now need to refinance your fixed interest rate mortgage to an adjustable rate mortgage.

Now, before you begin to panic and start calling me all kinds of unsavory names, read on, and you'll see why an ARM is actually a cash goldmine, and you need to start panning for this gold immediately.

When I was originating loans fulltime, I could barely get the word ARM out of my mouth, before the customer would say, "Oh no! I don't want an adjustable mortgage. I've heard how the rates change and your payment skyrockets, and some people actually lose their homes. No, no, I don't want my rate to change." Of course, once I illustrated the thousands of dollars they would save in just a few years and quashed all of those myths about loan payments "blowing up," most of them decided the ARM was not the "devil loan" it's made out to be.

But why risk an adjustment of your rate, you may ask, when you can have it fixed for the life of the loan? The answer is twofold and quite simple. The first part is the most important, and that is the average American either sells or refinances his or her home in four to seven years. So, if the chances are that you'll sell or refinance in five years, why fix your rate for 30 years at a higher interest than you can get on an ARM?

The second reason to get an Adjustable Rate Mortgage is because the interest rates are so much lower than fixed rates. And since these great rates are fixed for a particular period, five years on a 5-year ARM and three years on a 3-year ARM, there really is no risk, at all. Again, in most adjustable rate mortgage programs, the interest rate does not adjust monthly or yearly (although programs with these types of adjustment periods do exist at much lower rates).

For example, as of publication of this article in 2004, the 30-year fixed rate mortgage was going for around 5.75%, and a 5-year Adjustable Rate Mortgage was going for about 4%. Suppose you're financing $100,000. The 30-year fixed rate of 5.75% would give you a monthly payment of $583.57 (not including your taxes and insurance, which vary from state to state and county to county). The same $100,000 financed at 4.0% interest yields a monthly payment of $477.42. The difference in these two payments is $106.15. This is $1,273.80 each year, and $6,369.00 for five years. I can hear you saying, "Wow, that's hard to believe," but these are real numbers and real savings. You may be saying, "Sure, but the rates change." This is true, but the difference in the fixed rate mortgages and the ARMs is almost always the same, regardless of what rates the market bears, so you'll always save a ton of money in the difference in these two payments.

The numbers are even more staggering if you finance $150,000. The fixed rate payment is $875.36 and the 5-year ARM payment is $716.12 ? a monthly savings of $159.24 and over $9,500 for five years. If you buy or refinance a home and finance $200,000 or more, you'll save between $13,000 and $15,000 over five years, with the 4% rate as opposed to the fixed rate of 5.75%.

Bank that money and you can buy a decent car for cash, or pay for a year of college, or take a European vacation. Pretty powerful stuff, huh? Now, if you're one of those people who is really into cutting into the term of your mortgage, and you can afford the higher fixed-rate payment, simply apply the difference back to the principal loan amount. You'll build equity in your home very quickly, and you'll always have the option of paying the lower payment.

So, get your adjustable rate mortgage today, and start using your own personal goldmine.

Mark Barnes is author of the wealth-building system, Winning the Mortgage Game and other investment real estate books. He is also a suspense novelist, and his new novel, The League, will thrill both suspense and sports fans. Learn about Mark's wealth-building system and get his free home loan course at http://www.winningthemortgagegame.com. Learn more about The League and read an excerpt at http://www.sportsnovels.com

---

My Entrepreneurial Fire-I Grabbed My First Million Before I Got Too Old

My First Million took me exactly 27 months to achieve.... Read More

Why Get Rich When You Can Be Wealthy?

"Any fool can rich, the wise get wealthy." Chris WidenerGetting... Read More

How to Make More Money

When I was a student in London, I had a... Read More

Do You want to Live on Macaroni and Cheese when You Retire or Filet Mignon?

How Much Money Will I Need to Earn to Retire?This... Read More

Residual Income - The Myth

"Join our program and retire in 3 months..." yeah, right.We... Read More

Wealth Creation - Opportunity

When young men ask me how to succeed, I tell... Read More

Do You Want Money?

Let me ask you a very simple question. Do you... Read More

The Top 10 Steps to Becoming a Millionaire

There is perhaps no more important decision than to take... Read More

Don?t Work for Your Money, Make it Work for You!

Well, the New Year is around the corner and so... Read More

How To Be the Ultimate American Consumer

Feel like a lemming lately? Ready to follow the crowd... Read More

Wealth Secrets: Saving Your Way to a Fortune

SCENE 1: Pharaoh has just woken up from a very... Read More

You?re Eating Your Retirement Money

Ever think about how eating all those fast food meals... Read More

Profit from Your Own Information Empire!

Would you like to profit from your own information empire?... Read More

The Difference Between Wants & Needs

So you want to become wealthy? While there is no... Read More

The Underlying Belief System

Many of us do not consider the underlying belief system... Read More

The TRAP Behind Websites With INSTANT Searches for Unclaimed Money

There is no questioning that the amount of unclaimed money... Read More

A New Paradigm Shift In Earthly Wealth

Hello,If you dont understand this yet, or have not heard... Read More

Building Blocks of a Financial Foundation

You can't build a house from the roof down, and... Read More

Cost Averaging - It Makes Sense (Dollars & Cents)

It's no secret that the market goes UP...the market, goes... Read More

How Should I Create Passive Income?

If you're wondering where to create passive income, then you... Read More

How Much Do You Need To Earn Per Hour To Achieve Your Yearly Financial Goals

Have you ever asked yourself what your highest income producing... Read More

Personal Budget Programs

Do you have financial problems? Then a budget is the... Read More

Turbocharged Financial Planning

Financial planning is an ongoing process individuals and businesses should... Read More

7 Power Habits that Build Financial Independence

Financial independence is having the freedom to support yourself through... Read More

Do You Want To Save Money Easily?

Living on credit is fashionable. Indulging oneself is fashionable. Saving... Read More

Top 7 Lucrative Paper Businesses You Can Run

Why not run a lucrative paper business? Paper businesses do... Read More

The PDQ? Factor

It's the beginning of a brand new year: a time... Read More

3 Simple Ways to Generate Cash Flow

This article focuses on generating cash as a full time... Read More

Building Wealth: Its An Inside Job ? Part 1

Whenever we read about building wealth or even attend a... Read More

WARNING: The Biggest Lie About Social Security

Like I said, If you are poor and on social... Read More

I Dont Need A Financial Coach To Help Me!

You've been thinking that your financial life could probably be... Read More

Offshore Strategies & Services

Offshore strategies may or may not be right for you.... Read More

3 Steps To Increasing Your Income

Most accountants, financial planners and wealth-building experts agree that there... Read More