Top 5 Questions About This Revolutionary Home Loan

1. How can the loan pay off sooner?

The simple difference is that you direct-deposit all your income into the loan, dropping your principal balance dramatically. Since nterest is based on your daily balance, even if you spend most of your income during the month, your daily balance will be less than with a traditional loan, and you save on interest.

More of your income is available for paying principal, accelerating the increase in equity, all with no change in your spending habits. Naturally, the more you leave in your account, the more your loan paydown will accelerate.

2. If I pay off early, don't I lose my tax deduction?

Yes, and this is good, because you’ll be eliminating a major expense. I believe that “interest is not your friend.” Paying $3 in interest just to get $1 in tax deductions is not a smart long-term strategy.

Getting rid of your mortgage as soon as possible is a smart strategy. And, of course, the interest you pay is deductible (see your tax advisor for special situations).

3. The loan is based on the LIBOR index – is the margin slightly higher than other loans, and what if rates go up higher?

We’re changing the way mortgages are viewed. It’s no longer just about the rate. It’s how many total dollars of interest you pay on the lower principal balance. With a Home Ownership Acellerator loan, your principal balance is continually dropped down by direct deposits. This can offset the cost of a higher rate because you pay interest on a much lower balance.

And this effect compounds as time goes on and your principle drops faster and faster. The best way to see this is to use the Interactive Simulator. You’ll see why a slightly higher margin on this loan, which is necessary due to its highly transactional nature, has such a slight effect on the overall payoff duration and total interest paid.

4. How much are my payments?

Again, we’re changing the way you think about a mortgage. Every direct deposit of your payroll, or added funds from any source, in effect makes a payment. At the end of every monthly billing period, interest is charged based on your daily unpaid principal loan balance.

You're not required to make a specific payment amount or penalized for additional payments. If you've spent less of your income during the month, it is applied to your principal balance. The more disciplined you can be about your spending habits the more you are rewarded.

5. Is this home loan right for me?

The CMG Home Ownership Accelerator is best suited for responsible homeowners, who understand that parking their cash against their loan balance will earn them a higher effective return than putting it in a low-interest, or no interest, checking or savings account.

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