Equity Acceleration Plans to Watch Out For

            As indicated in other parts of this web-site, the H.E.A.P™ concept is not a new one, it’s just one that is not well known.  It is starting to become more well known by “vendors” pitching plans that we believe are NOT client focused and instead are advisor focused.

            An advisor focused plan is one that tries to maximize dollars an advisor can make from a client that doesn’t know any better.  

            Look at the following e-mail from an advisor looking at the H.E.A.P™ vs. one of the advisor friendly programs.

            “Yes I would like to find out  more (about H.E.A.P™) but to be honest if I can make a $2,250 commission …… then I would stick with this one from ……..”

            The name of the company has been omitted as has the name of the advisor who wrote the e-mail.           

            Does any more need to be said?  Some advisors and marketing firms have maximum profit as a goal vs. client first advice that will help advisors keep their clients for the long haul.

            1) Watch out for any program that costs $3,500.           

            We have to give them their due, they have a really slick marketing package and a very powerful sales pitch.    Their program is sold on the benefit to the consumer (which is a savings of $100,000 plus for most) and for that a cost of $3,500 is reasonable. The firm will even let you finance the $3,500 (how nice of them).

            As you will learn if you chose to learn about H.E.A.P™, the program is really not that difficult and to charge $3,500 for the advice and accompanying software in our opinion is an outrage (and really was part of the motivation to create H.E.A.P™).

            Part of the sales pitch is a wonderful software package a consumer is provided with.  It could be the best software in the world, but it’s not worth $3,500 for the simple reason that you don’t even need software to implement H.E.A.P™ or any other similar program.   We believe most consumers will want the H.E.A.P™ software to help them budget the program, but the first year cost less than $500.00, not $3,500.

            If you run into this program and want to discuss it with David Lukas who is a H.E.A.P™ certified advisor, please e-mail us at: Info@PayoffMyHomeMortgage.com and a member of David's Team will contact you to schedule your mortgage planning consultation. Please put H.E.A.P. in the subject line of the email.

            2) Stay away from any program that REQUIRES you to refinance your primary mortgage.

            H.E.A.P™ or any similar type of acceleration program DOES NOT require you to refinance in order to take advantage of the benefits.

            Many people refinanced a few years ago when interest rates were at an all time low and still have 25+ years left on their mortgages.   If the rates on those loans are very low, why would anyone want to refinance those?

            The sale’s pitch that you MUST refinance so you can take advantage of an acceleration program to pay off the debt early.    That is not true.

            Then the programs out there force clients to refinance into a variable loan rate typically tied to the Prime interest rate. Today Prime is over 8% and some of the programs have Prime + loans.           

            To show you the power of H.E.A.P™, the plan would still work to pay off your home’s debt 10+ years early even if you went from a 6% loan to an 8%+ loan.  Having said that, there is NO reason do refinance your current mortgage except…….except that if you don’t refinance your mortgage an advisor then makes no money on a new mortgage sale.

            Again, like the $3,500 program, the average consumer has never heard of any of these plans that REQUIRE you to refinance your entire mortgage to take advantage of the acceleration and therefore, when the consumer is told they have to refinance even into a program tied to a Prime rate that floats, the consumer does it because they don’t know any better.

            Don’t do it.  Do not get rid of your mortgage and refinance into a loan with a higher rate especially if it floats (is not locked).  You don’t have to do it order to use H.E.A.P™.

            If you have been pitched other acceleration plans and would like to discuss how they differ from H.E.A.P™, feel free to e-mail HEAP@PayOffMyHomeMortgage.com  to schedule a time to meet with David Lukas who is a H.E.A.P™ certified advisor.