Rate does NOT matter!!! Pretty bold statements right?
“I want the lowest rate”
I’m sure you’ve said this before when discussing home financing needs right? Taking a peak behind the curtains reveals that what they really mean is, “I want to save as much money as possible”. This means that what you should be focused on when researching home financing is how much the mortgage will COST you, as opposed to simply WHAT the rate is.
When it comes to saving on interest costs, nothing is more important than principle pay down and the ease with which bank allows a client to do so. All-in-one products allows you to effortlessly and automatically deposit up to 100% of your income into your account, which is applied instantly against your principle resulting in a lower balance subject to our simple daily rate calculation the very next day. This ensures that all of your money is working for you every single day, which greatly reduces the overall cost of your “mortgage” over time. Keep in mind this only addresses rate and money savings even though the all-in-one account does so much more.
Careful, it’s a trap!
Reduced Rate mortgages are literally a financial trap intended to snag as many unsuspecting clients as possible. These mortgages cannot be broken during the term unless you move or transfer to another product, which would then be subject to penalty. There is very little in the way of pre-payment privileges as well. Most people do not have this explained clearly to them.
Traditional Banking is Broken
By design; traditional banking only works if the bank has the majority of its clients constantly committed to long term expensive debt. While at the same time, maintaining positive cash accounts with little to no return. Clients get to a point where the majority of their cash flow is going towards bank profits or interest each month vs paying down debt principle or doing what’s in their best interest like investing, having the right insurance mix, etc. The issue here is that you have the opposite goal, that is to pay down debt as quickly as possible, plan for the “what ifs” and the future, as well as improve overall net worth.
So there is a major disconnect between what the business of traditional banking is designed to do and what every client’s ultimate financial goals are.
Even people without debt agree that lending their positive dollars to their bank for free is counter-productive. Having to call their bank anytime they wish to access large sums of money can be a hassle and using an all-in-one account as a tax free income source with ultra-flexible repayment makes sense.
There are very few people who have had their bank/banker educate them on why banking is the way it is, or explain semi-annual compounded vs simple daily interest, or call them out of the blue to suggest they pay off their 19% credit card debt with their savings account balance earning .5% saving them 18.5% interest, or show them one single part of traditional banking that has their best interest (and not profit) in mind.
Our Message Has Not Changed
Now more than ever, it is vitally important that we continue to educate clients in a different way, a better way to handle their finances in a system that is as easy as money in vs money out. A system that is designed to enable the most and fastest principle pay down possible while affording freedom, flexibility, transparency, and financial autonomy available nowhere else.
If you have any questions, feel free to give us a call at 905-331-1442.