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Offset Mortgages in Financial Planning

Dear Reader; I've been involved with financial services since 1981; 32 yrs in Life, health, and annuities, 2 yrs Series 6 (Mutual funds); 14 yrs Series 7 (General Securities Registered Rep) and 11+ years in mortgage lending. I'm becoming more convinced that the most valuable part of my Financial Advisory practice is (in fact) my experience at solving problems using unique mortgage programs not commonly offered by regular Loan Officers. Among the programs I've used in mortgage lending would be the FHA Reverse Mortgage HELOC, Jumbo Reverse mortgage HELOC's, and the "Offset" mortgage. While I have resolved more issues with the FHA reverse mortgage than you can possibly imagine, let me focus today on the offset program.

Unlike a reverse mortgage, the "offset program" is not for everybody. One must have a FICO of +700, and significant cash flow for it to work. Additionally, it is not a "commodity" loan, and it requires me to hold a certification to be eligible to offer it to the public. FHA, VA, Conventional and similar programs are "commodity" loans. The Loan Officer (LO) has to navigate terms, rates, conditions, and if they can get 2 out of 3? They'll generally get the loan.

That's not the same with an "offset" program.

Another big deal is that one must appreciate quality. This is a quality loan, and can do more than just finance a property purchase or refinance. Many people consider these as "expensive". Yes. They are, and they do a lot more for the Borrower and do it far more efficently than the conventional loan product can. It will serve you for 30 years, and will (likely) be the last loan you have (it's THAT efficient).

Have you ever considered how a conventional loan works? Let's look at your recent monthly mortgage statement.

Find the Principal and interest component. convert the two into a ratio of the total P&I payment. If your payment is $2500/month, and your P is $500 of the 2500? thats a 1:5 ratio or only 20% of the payment actually reduces the debt. This is grossly inefficient, and opens the doors to highly qualified homeowners to change this scenario to their favor.

An "offset" mortgage is a HELOC with an attached Checking account. This means that (unlike any other type of HELOC), you can have direct deposit of all income streams from rentals, royalties, distributions, dividends, salaries, bonuses, commissions, etc into this checking account and have 100% of your pay received immediately reduce the debt dollar - for - dollar. Assume you get paid $10,000 on the 1st/15th and lets say your mortgage debt is $200,000.00. The 1st payment reduces your loan debt to $190,000, and then you spend back by paying your bills. Since you have the required positive cashflow of at least 20-25% over expenses each month, and let's assume that you have a 50% positive cash flow, you spend back $5,000/$10,000 and have a net gain on equity of $5,000.00, which corrects your debt balance to$195,000, and then, you get PAID again on the 15th, and the same thing ensues. Afterr 1 month (2 pay periods) you've reduced your debt by an astonishing $10,000! With 25-30% cash flow, a program like this reduces mortgage interest and mortgage duration by about 65%. That's a MAJOR difference, a savings of both TIME and COST, and that is after expenses. It's also a 30 year HELOC, not 10 with a 20 yr amortization.

Have you ever wondered why your bank has $50,000 of your money in a savings account paying you 1/10th of 1% per year but they charge you 3-5% on your mortgage balance? In an offset program, the interest you don't pay is greater than the interest you would have earned, so you place the deposit against your mortgage. If you need some, part, or all of the money? No surrender charges, and you can use your checking account to access it. or, your debit card(s), or, ACH, ETF, Wire transfer, etc.

I love working with programs like this; they are very helpful with regard to helping my clients build equity rapidly and cost-efficiently. If you think this might be a good "fit' for you (or that I might be a good fit for you), Call (or text) me today. 808-464-5202
and get your FREE "Generational Vault" for safekeeping your most important family records!

Copyright 2023 Daniel J Turner Akamai Wealth Management, LLC All rights reserved.

Daniel J Turner is a licensed Mortgage loan originator (NMLS#1016716) and is employed by Geneva Financial LLC (NMLS#42056). Mortgage lending activities are fully disclosed in the "Akamai" ADV 2-b as an "ouside business activity" as required by law. Dan can be found with his registration identifier number
CRD# 322422.

Hawaii residents schedule a free consultation for acquiring and managing wealth, retirement and debt reduction. Questions? Text or call 808-464-5292

Wealth Management/AUM - Charitable Trust (CRUT, CRAT, LEAD/REMAINDER) Advisory Services are offered by Akamai Wealth Management, LLC an Investment Advisor in the State of Hawai'i.

Insurance products and services are offered through Akamai Retirement Concepts, LLC, an affiliated company. Mortgages and Equity Sharing/Equity Release programs (where allowed by State Statute) are originated and funded through Akamai Equity Concepts, LLC. Akamai Wealth Management, LLC and Akamai Retirement Concepts, LLC and Akamai Equity Concepts, LLC are also affiliated with AWM, but are not affiliated with or endorsed by the Social Security Administration or any government agency, and are not engaged in the practice of law.

Daniel J Turner, Principal Advisor
Akamai Wealth Management, LLC
1088 Bishop St. Executive Centre Ste 3007
Honolulu, HI 96813
808-691-9200 office
808-464-5292 direct

Advisory services are offered through “Akamai Wealth Management, LLC”. (AWM) a registered Investment Advisor registered in the State of Hawaii.

​All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Nor is it intended to be a projection of current of future performance or indication of future results. Purchases are subject to suitability. This requires a review of an investor’s objective, risk tolerance, and time horizons.

Investing always involves risk and possible loss of capital.

AWM and Dan Turner ( Principal) are not attorneys or accountants and do not provide comprehensive legal or tax advice. For full disclosure of all relationships associations, affiliations, fees, charges, and capacities please request the ADV 2 A&B from Dan Turner.

Mr. Daniel J. Turner is now helping the following cities on Oahu in Hawaii with financial advice: Aiea, Ewa Beach, Hale'iwa, Hau'ula, Hawaii Kai, Honolulu, Ka'a'awa, Kahala, Kahuku, Kailua, Kaneohe, Kapolei, La'ie, Lanikai, Ma'ili, Makaha, Manoa, Mililani, Nanakuli, Pearl City, Wahiawa, Waialua, Wai'anae, Waikiki, Waimanalo, Waipahu along with all the Hawaiian islands. Text or call 808-464-5292