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Good job Brian. Brian if I may ask you, what is a mortgage plan questionnaire?

Dimitrios Gikas

I can appreciate the effort in helping clients as much as possible and I believe that is what you are trying to do, but that being said, the numbers in this demo are very misleading:

As great as this looks on paper..where were the closing costs (I guess we are to assume that this is a no closing cost loan?) Is this an IO 5 yr ARM? or 30 yr fixed IO? The monthly "savings" is mainly because of the IO (and the fact you are stretching the 2nd lien from 12 yrs into 30 yr AMM IO).

The other misleading part is the 25 yrs to pay off on current loan and 20 and change on proposed loans..the reason is proposed loans are using extra money from a loan that would be paid off in 12 yrs, if you applied the 300 bucks plus in years 12 through 20, their current structure would pay off in about the same time frame as proposed loans.

And the last misleading part is the 5, 10, and 15 yr comparison showing principle built up, says current loan is ZERO at each, but multiplies out the 212 times the chosen comparison point, their current loan HAS principle reduction, just because it is not IO with "prepayments" doesn't mean it is zero.

The reason a lot of us would have missed it, it there is very very very little benefit to actually doing it. I am surprised if you send this to a financial planner or accountant someone hasn't asked about "numbers" of this proposal.

Brian Kludt

Hi Dimitrios

Thanks for the feedback and comments. Your in-depth analysis appears to be based almost wholly in part on one huge incorrect assumption: The proposed loan scenarios I present are not IO loans. They are fully amortized 30 year fixed loans. Your comments forward appear to be based on your assumption re: IO so I won't comment further on the individual points you made about misleading elements.

Your assumption re: a no cost loan is correct; however, even with costs this illustration will still be relevant as Wisconsin is a relatively low closing costs state ($1500-$2000.)

Brian Kludt

Hi Sivanu -

Take a look at my web site and you can see my Annual Mortgage Plan Review Questionnaire

Good luck!

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