Three Components of an MMA

1
(No Transcript)
2

• Three Components of an MMA
• Your 1st Mortgage
• Advanced Line of Credit (ALOC)
• MMA Software Web Site

3
Component 1 -Your 1st Mortgage

• Component 1
• Your 1st Mortgage
• Closed-End Loan
• The bank will ONLY apply monies once a month to
  this type of loan and will only apply a full
  payment to adjust principal balance

4
Component 1 -Your 1st Mortgage

• Closed-End Loan
• 200,000 Principal loan amount
• 6 Interest
• 1,199 Monthly payment
• x 360 Months (30 year loan)
• 431,677 Total repayment
• -200,000 Principal loan amount
• 231,677 Total interest paid

5
Component 1 -Your 1st Mortgage
Sample Loan John and Rebecca Jones 200,000
Principal Balance 6 Interest Rate 1,199
Monthly Payment
6
Component 1 -Your 1st Mortgage
Sample Loan John and Rebecca Jones 200,000
Principal Balance 6 Interest Rate 1,199
Monthly Payment
7
Component 1 -Your 1st Mortgage

• Traditional Prepayment Example
• 1,199 First monthly payment
• 5,000 Additional principal payment
• 6,199 Total first payment

8
Component 1 -Your 1st Mortgage

• Prepayment Savings Example
• 195,000 New principal loan balance
• 6 Interest rate
• 1,199 Monthly payment
• 359 Months
• 231,677 Original interest paid
• 208,368 New interest paid
• 23,303 Total Savings

9
Component 1 -Your 1st Mortgage

• Conventional Banking
• Refinance to lower interest rate
• Apply more money to principal
• MMA System
• No refinancing necessary
• No alteration to current cash flow

10
Component 2 -Your 1st Mortgage -ALOC

• Component 2
• Your 1st Mortgage
• Advanced Line of Credit (ALOC)
• Open-End Loan
• The Bank will apply money to this type of loan
  when received and adjust principal balance
  multiple times per month.

11
Component 2 -Your 1st Mortgage -ALOC

• Optimum Performance of ALOC
• Deposit maximum amount of money into the line
• of credit per month
• Keep it there as long as possible
• Least amount spent by the end of each month
• ALOC Functionality
• Functions as a primary checking account
• Deposit all of your income into ALOC
• Ability to pay all bills using ALOC

12
Component 2 -Your 1st Mortgage -ALOC

• Model Monthly Budget
• 5,000 Monthly income
• -4,000 Living expenses
• (mortgage, entertainment, car payment, etc.)
• 1,000 Discretionary income

13
Component 2 -Your 1st Mortgage -ALOC

• MMA Month 1
• 60,000 Line of Credit available (ALOC)
• -3,500 MMA one-time fee
• -4,000 Living expenses
• -7,500 Balance owed
• -7,500 Balance owed
• 5,000 Paycheck (deposit)
• -2,500 New balance owed
• The bank can only charge interest on 2,500

14
Component 2 -Your 1st Mortgage -ALOC

• MMA Month 1 Conclusion
• -3,500 Starting balance
• -2,500 Ending balance
• You have never made a scheduled monthly payment
• Your income represented your monthly payment
• -7,500 Money borrowed from ALOC
• -2,500 Interest assessable balance

15
Component 2 -Your 1st Mortgage -ALOC

• You paid NO interest on the 4,000 you
  used to pay your living expenses
• Your ALOC becomes an
• Interest Cancellation Account
• Tax deductible
• consult your tax adviser

16
Component 2 -Your 1st Mortgage -ALOC

• Closed-End Loan
• Eliminate interest
• Control your money, so your money doesnt control
  you
• Get your money working for you instead of working
  for the bank
• Open-End Loan
• Income forces adjustment to principal balance
• Interest Cancellation Account

17
Component 3 -Your 1st Mortgage -ALOC -MMA
Software

• Component 3
• Your 1st mortgage
• Open-End ALOC
• MMA software and website
• Financial dashboard
• Financial planning
• Online account register
• Maximizes money performance
• 10 minutes per month to update

18
Component 3 -Your 1st Mortgage -ALOC -MMA
Software

• The MMA Website
• Does NOT move money
• Does NOT pay bills
• Is user friendly software
• Is simple to update
• Is a tracking tool
• Functions as an account register
• Wants to know how much money is coming in
• Wants to know how much money is going out
• Tracks your monthly budget
• Includes continuous customer support

19
Component 3 -Your 1st Mortgage -ALOC -MMA
Software
20
Component 3 -Your 1st Mortgage -ALOC -MMA
Software
21
Component 3 -Your 1st Mortgage -ALOC -MMA
Software

• Understanding an Advanced Line of Credit
• It is not a savings account
• It is the vehicle that drives the MMA software
• It cannot drop below a 0 balance

22
Component 3 -Your 1st Mortgage -ALOC -MMA
Software

• MMA Month 2
• - 2,500 Balance owed
• - 5,000 Pay down 1st mortgage
• - 4,000 Living expenses
• -11,500 New balance owed
• Interest Cancellation
• -11,500 Balance owed
• 5,000 Paycheck (deposit)
• - 6,500 New balance owed
• The bank can only charge interest on 6,500

23
Component 3 -Your 1st Mortgage -ALOC -MMA
Software

• MMA Month 2
• - 2,500 Balance owed
• - 5,000 Pay down 1st mortgage
• - 4,000 Living expenses
• -11,500 New balance owed
• Interest Cancellation
• -11,500 Balance owed
• 5,000 Paycheck (deposit)
• - 6,500 New balance owed
• The bank can only charge interest on 6,500

24
Component 3 -Your 1st Mortgage -ALOC -MMA
Software

• MMA Month 2 Conclusion
• -2,500 Starting balance
• -11,500 New balance
• -6,500 End balance
• You have never made a scheduled monthly payment
• Your income represented your monthly payment
• -11,500 Money borrowed from ALOC
• -6,500 Interest assessable balance

25
Component 3 -Your 1st Mortgage -ALOC -MMA
Software

• You paid NO interest on the 5,000
  you used to buy down the principal balance
  on your primary mortgage
• You traded 23,304
  of closed-end interest charges
  for an open-end
  finance charge on 6,500
• (54.17)
• That is the magic of MMA

26
Component 3 -Your 1st Mortgage -ALOC -MMA
Software
27
Component 3 -Your 1st Mortgage -ALOC -MMA
Software
28
Component 3 -Your 1st Mortgage -ALOC -MMA
Software
200.79 156.92 43.87
157.61 156.92 .69
29
Component 3 -Your 1st Mortgage -ALOC -MMA
Software
200.79 156.92 43.87
157.61 156.92 .69
30
Component 3 -Your 1st Mortgage -ALOC -MMA
Software
Comparison
126,032
126,193
Loan amount 136,058
31
Your home is paid off in 11.3 years,plus

• Now invest the available 1,199.10 per month for
  the remainder of the 18.7 year term and realize a
  potential nest egg of

6 494,000
8 619,000
10 782,000
32
Financial Optometrist

• Option 1 Option 2
• Years to pay off mortgage 11.3
  30
• Effective interest rate 1.657 6
• Interest paid 54,897 231,677
• Interest saved 183,056 0
• Retirement account 494,000 0
• Pay off at age 51 yrs old 70 yrs
  old
• Move forward with MMA, or keep doing what your
  doing