San Francisco Chronicle

After mortgage meltdown, more homeowners trying to pay down debt

Homebuyers today are starting to sound a little bit more like their parents. As lenders have clamped down and price appreciation has waned, perceptions about homeownership have changed - and so have the kinds of loans that borrowers are seeking, mortgage brokers said.
New products, such as a loan called the CMG Home Ownership Accelerator that is designed to help borrowers pay down debt more quickly, are becoming popular, as the adjustable-rate mortgages that dominated the market for several years are falling out of favor, lenders and real estate agents say.
"There is a shifting perception about what owning a house means," said Catharine Bramkamp, an agent with Century 21 in Petaluma. "For the last five years, it was about buying a home and then turning around as quickly as possible and using it as a piggy bank. Now, people who are buying houses have more traditional goals, such as paying off their loans."
The CMG Home Ownership Accelerator, a mortgage modeled after an Australian program that has been around since the mid-1990s, has garnered interest from homeowners such as Tim Robison, a 39-year-old information technology manager. "My goal has always been to retire by the time I was 50," Robison said. "The only way to really do that is to have no debt.”The Danville resident, who bought a four-bedroom home with his wife two years ago, recently refinanced his mortgage to help him achieve that goal by taking out such a loan. After hearing an advertisement on the radio for the loan, offered by San Ramon's CMG Mortgage, Robison decided to refinance the $650,000 mortgage he had on the $895,000 home. Since taking out the loan in February, Robison says he has reduced his debt by almost $50,000. CMG markets the Home Ownership Accelerator, a term it has trademarked. When the housing market was strong and mortgage money was easy to come by, the loan was slow to catch on, but mortgage brokers and real estate agents say they expect that to change as stagnating home prices and the credit crunch have caused homeowners to reassess their priorities. The CMG loan is designed to help homeowners pay off their debt more quickly by tying together a homeowner's mortgage and checking account, according to Doug Nesbit, a vice president at CMG. It works like this: Each time borrowers receive a paycheck, instead of depositing it into their bank accounts, the money is put into a special account that is tied to the mortgage. As money is added to the account, the balance on the loan falls, allowing the borrower to save money on interest payments over the 30-year life of the loan. At the same time, any other expense paid out of the account increases the loan's balance. Still, Nesbit says that savings can add up to hundreds of thousands of dollars and borrowers can pay their loans off much faster. Robison says he hopes to own his home free and clear in just 10 years.
I am looking forward to discussing this loan with you in more detail. We have a 5-minute movie that explains the product in more detail, and we can run a simulation on your specific financial situation to determine how the product will work for you. Give me a call! A twenty-minute conversation could save you thousands in interest and get you free of mortgage debt twice as fast as you thought possible.
http://www.cmgfs.com/home_loans/cmghome/movie/player.html

Equipoint Financial
Mortgage Solutions
Brad Simpson
Office: 623.932.3554
BradSimpsonLoans@yahoo.com