Borrow Smart®

Realtor Education Workshop

Understand how the house creates wealth for
your clients…

and how borrowing

influences that wealth.
Presented by: Values-Based Lending®
Copyright 2006, KendallTodd, All Rights Reserved
 2
Kyle Williams, RFC®, CMPS™, CLA™

• Principal – Capital Equity Management, LLC

• Partner – Mortgage Choice & Values-Based Lending®, Inc.
• VP and Co-Founder – Eastern Omni, LLC: Land Acquisition &
Development
• Founder – North Carolina Institute of Education
• Creator of Strategic Synergy™
• Registered Financial Consultant®
• Certified Mortgage Planning Specialist ™
• Certified Liability Advisor™
• Realtor®, CPA, and CFP® Educational Facilitator
• Helping clients maximize wealth through liability management.

Copyright KendallTodd, Inc. 2006 – All Rights Reserved – 1.23.06

What Do We Know? 3

Mo
rtg
True or age
False?
l s e s?
Fa e
1. A large down payment will save you more money
on your
l s
Fa
mortgage over time than a small down payment.
2. A 15-year mortgage will save more money over time
than a
30-year mortgage.
l s e
a
3. Making extra principal payments save you money.
F
s e
cost of a mortgage. al
1. The interest rate is the main factor in determining the
F
5. You are more secure having e
a l s your home paid off
than
financed 100%. F
Copyright KendallTodd, Inc. 2006 – All Rights Reserved – 1.23.06
 4
Million Dollar Question(s):

What if…
most of what you thought about
wealth in the house was wrong,
when would you want to know
about it?

Copyright KendallTodd, Inc. 2006 – All Rights Reserved – 1.23.06

 5
Why People Fear Mortgages…

…And Why You Shouldn’t

Our Story begins in
the Great
Depression.

Copyright KendallTodd, Inc. 2006 – All Rights Reserved – 1.23.06

 6
Dismissing Old Concepts

Today’s financial experts advise us

to handle our money according to
how we live today, not how our
grandparents lived!

Copyright KendallTodd, Inc. 2006 – All Rights Reserved – 1.23.06

 7

What The Experts

Are Saying…
Ric Edelman is the best-selling
author of
■ Ordinary People, Extraordinary
Wealth
■ The Truth About Money
■ The New Rules of Money
■ Financial Security in Troubled Times
Discover the Wealth Within You
Secret
■

Edelman Financial Services, Inc.

#1: ■ Fifth largest independent financial
Use your planning firm
mortgage to ■ With more than $1.7 billion in
create wealth client assets

Copyright KendallTodd, Inc. 2006 – All Rights Reserved – 1.23.06

 8
Home Equity in Your Financial Plan

• “Too often, people buy homes in a

vacuum, without considering how that
purchase is going to affect other aspects of
their lives. This can be a big mistake, and
therefore you must recognize that owning
a home holds very important implications
for the rest of your financial plan.
Although a fine goal, owning a home is
not the ultimate financial planning goal,
and in fact how you handle issues of home
ownership may well determine whether
you achieve financial success.”

Copyright KendallTodd, Inc. 2006 – All Rights Reserved – 1.23.06

 How much would you deposit in 9

the following investment

0
account?
The customer can pay more than the minimum monthly

$
contributions, but not less.
If the customer attempts to pay less, the financial
institution keeps all the previous contributions.
The money deposited in the account is not safe from loss or principal.

Each contribution made to the account results in less safety.

The money in the account is not

liquid.
The customer’s income tax liability increases with each contribution.

When the plan is fully funded, there is no income paid out.

The customer determines the amount and length of time for monthly
contributions to continue.

The money in the account earns a 0% rate of

Copyright KendallTodd, Inc. 2006 – All Rights Reserved – 1.23.06
 10
Job Loss

I Brought Your Loan Application

Up To The Board This Morning And Their Response
Was . . .

“Fat
n c e! ”
Cha

Copyright KendallTodd, Inc. 2006 – All Rights Reserved – 1.23.06

 11
What Do You Do At The End Of The Month?

• “Here is an extra $100

principal payment Mr.
Banker. Don’t pay me any
interest on it. If I need it
back, I’ll pay you fees,
borrow it back on your terms,
and prove to you that I
qualify.”
• Money that you give the bank
is money that you’ll never
see again unless you
refinance or sell.

Copyright KendallTodd, Inc. 2006 – All Rights Reserved – 1.23.06

 12
Periods Tax Free
$1
1 $2
2 $4
A Dollar 3
4
$8
$16

Doubling 5
6
$32
$64

every 7
8
$128
$256
9 $512
Period 10
11
$1,024
$2,048

for 20 12
13
$4,096
$8,192

Periods 14
15
$16,384
$32,768
16 $65,536

Tax 17
18
$131,072
$262,144
19 $524,288

Free 20 $1,048,576

Copyright KendallTodd, Inc. 2006 – All Rights Reserved – 1.23.06

 13
Taxed as
Periods Earned
$1
1 $2
A Dollar 2
3
$3
$5

Doubling 4
5
$9
$16

every
6 $27
7 $46
8 $80
Period 9
10
$139
$240

for 20 11
12
$415
$719
13 $1,243
Periods 14
15
$2,151
$3,721

Taxed 16
17
18
$6,438
$11,137
$19,268

as 19
20
$33,333
$57,666

*Assuming a 27% tax bracket

Copyright KendallTodd, Inc. 2006 – All Rights Reserved – 1.23.06
 Rollercoaster
Fed Funds Rate Since 1990 14

Copyright KendallTodd, Inc. 2006 – All Rights Reserved – 1.23.06

 15
Collaring The Wealth

Collar the wealth by increasing your HELOC

periodically to gain access to your appreciation.

Remember, it’s always better to have access to it and not need it,
than to need it and not have it!

Copyright KendallTodd, Inc. 2006 – All Rights Reserved – 1.23.06

 16
What?

Copyright KendallTodd, Inc. 2006 – All Rights Reserved – 1.23.06

 17
Online Virtual Meetings
Advisor’s Insight® helps me “show the way”.

www.MeetKyleNow.com

Copyright KendallTodd, Inc. 2006 – All Rights Reserved – 1.23.06

 18
A Parting Gift To You

We have a booklet for each of you to

take home called, ‘How The Affluent
Manage Home Equity’. This booklet
will further your understanding of
the concepts and strategies
discussed here today.

Copyright KendallTodd, Inc. 2006 – All Rights Reserved – 1.23.06

 19
Thanks Again For Your Time

Presented by:

Kyle Williams, RFC®, CMPS™, CLA™

Values-Based Lending®

300 Parkthrough Street, Cary, NC,

27511
(919) 459-1077
Kyle@YourEquityAdvisor.comCopyright KendallTodd, Inc. 2006 – All Rights Reserved – 1.23.06