So many times I have heard the question “what’s the rate” or “what are rates today” or “what rate did you get?” I’m sure I’m not the only one to hear these statement/questions either. Many people say these things all of the time.

From the title of this article, if interest rates are not the importance of the loan, what is?

Let me start by saying interest rates are important, I do understand this. Obviously, rates set the payment and determine how much interest is paid. However, on a calculator (mortgage or other loan), the rate is changed. What this means is that the rate is secondary to the loan calculation, a.k.a. amortization schedule. That’s right the amortization is more important than the rate. This is just one key factor to understanding the bank that I discuss in Barking With The Big Dogs so people can understand the inner workings of the bank. But rather than go into the real meaning behind the amortization right now, which is not to simply just show numbers with payments and interest like everyone else does, let me continue with a question…

If rates were the importance of a loan, then why do banks and credit unions build new buildings when rates are at their lowest?

(You can get the answers in Barking With The Big Dogs…but only for a limited time while it’s still available. Get a copy today before the copies are gone.)

Why is all of this important to you? It’s your money, that’s why!

Okay, so I eat at Chili’s restaurant quite frequently. Been doing so for years and will continue to do so.

Chili’s has (from time to time at least) a $20 for two meal special. Is that a great deal, or value?

Maybe, but Barking With The Big Dogs is now available on Kindle for $15 – and the value here is the insight about banking and lending that affects a lifestyle, not just dinner for an evening.

Download today, or get a paperback copy!

Barking With The Big Dogs is available on my website, Amazon.com (see Shop Now – it will take you there) and Amazon’s Kindle in just few days!

Get a copy today.

Beating the bank at its own game means thinking like a bank.

Barking With The Big Dogs introductory promo ends tonight.

The following is a quote from Gordon Gekko in the movie Wall Street (1987). Many lines worth remembering (to me) came from this movie.

(Link) View more Economics Sound Clips and Finance Sound Clips

What a great line…and it doesn’t just have to be insider trading on Wall Street.

True, the movie shows the downside to greed, money and Wall Street; but, with every dark cloud a silver lining can be found. That’s why I wrote Barking With The Big Dogs.

Barking With The Big Dogs is about finance, in particular a mortgage. The realization is most people cannot afford to pay cash for a home and going to the bank or mortgage company happens for a huge percent of the population.

As a result of so-called greed, fat cats, foreclosures, selling risky loans, debt, etc., the bank and borrowing money are viewed negatively by many people (from what I’ve read and heard) – and probably correct to some degree in my opinion as well. However, having the valuable commodity of information can level the playing field for the borrower.

Therefore, you should only go to the bank for one reason…to make money…otherwise, you might just want to stay out.

Barking With The Big Dogs will show you the same strategies the banks and mega institutions use everyday – and now you can use those same strategies yourself. Get a copy today!

Barking With The Big Dogs is now available.  Enter the Promo Code for a limited time only special.  Thanks.

Make Money In 2011:  Your Home is the caption from an article in Yahoo finance.

There are a few problems with the article as opposed to the title – when you read the Action Plan: Owner, you are encouraged to save money, decrease cash flow and increase equity.

If you want to see how to make money on your home read “Barking With The Big Dogs“.

Paperback is due out on Amazon.com February 1 and will be available on Kindle as well.

I was listening to a commercial talking about reverse mortgages. We will probably continue to see and hear more about these loans since with the baby boomers and population are getting older and the market for the reverse mortgage grows.

What I found interesting on one radio slot was the statement about getting monthly income tax free. (Not quoting exactly, but if I recall the statement was very similar.) Tax free income from your home each month, really? I’m not sure if that is entirely true, but taking profits without selling the home may be more inline. And, definitely getting equity money out is true too.

Really though, are people getting income, or simply a monthly draw against the equity in the house in the form of a loan? A loan, not income. The balance has to be repaid at some point; either if the house is sold or the estate pays the balance, plus interest. Income does not have to be repaid.

The following paragraphs are excerpts from Barking With The Big Dogs…

“The reverse mortgage lets the owners get the money back out of the house without selling the home. Of course, many reasons, from living expenses to investment purposes, exist for wanting the money out of property and making the choices to access funds. ”

To continue from the chapter Refinancing By Design…

” A reverse mortgage is an adjustable rate mortgage the owner does not have to make payments on, or pay off, provided the owner lives in the house or until the surviving spouse dies. The heirs or estate will be responsible for the debt.

The bottom line for reverse mortgages is simple. If people use their mortgage and resources correctly to begin with, they may want and get a reverse mortgage, but will not need one.”

Believe half of what you see and none of what you hear is an old expression. Even older than the internet itself, because if memory serves me correctly, Al Gore – the “father” of the internet was not around when Ben Franklin made the statement.

Then again, I found the statement on the internet and wasn’t there either, but I remember the quote as a kid and we didn’t have the internet. Therefore, the statement, or one similar has been around a long time.

What made me think of famous quote happened the other day after I was giving an interview on the radio. The host made the comment asking what, and if, we can really believe “stuff” on the internet is true; thus questioning the validity of the most stories circulated throughout the internet and passed on in e-mail forwards. According to Ben Franklin, we shouldn’t believe anything on the radio since the messages coming through airwaves are spoken, thus heard.

While listening to the radio the other day, I caught a few seconds of Crown Financial Ministries talking about mortgages. The host stated mortgage requirements are getting lax again believes everyone should use a 20% down payment when getting the loan. Why 20%? He didn’t elaborate. I assume he is just repeating everything he has heard as well, because the answer was not detailed, just a quick opinion. Stating the obvious is an easy sell, and yes, talk shows are selling a product – the agenda. (Read Monkey Business in my book Barking With The Big Dogs and I’ll explain in detail. In addition, I’ll explain what is key about a 20% down payment – not just repeat what is typically spoken.)

Moving from the radio to the internet and speaking of e-mails, I get the Bleacher Report delivered via e-mail. One day while talking to a colleague of mine, he stated he didn’t like the Bleacher Report because it was a bunch of bloggers. “Bloggers are biased” he said. Okay, so are newspapers; otherwise, why would the newspaper endorse a candidate such as Bill White (candidate for Governor of Texas) as the Abilene Reporter News and their other affiliates did? They are biased for Bill White, not equally for Rick Perry. Furthermore, showing bias, I had a comment not published that was in direct response to a previous post on their website. Moreover, newspapers are aggregators of information just like the Bleacher Report. (An aggregator is a collection of items.)

The Bleacher Report collects and distributes sports stories from The Austin Statesman, The Dallas Morning News, ESPN, etc., and yes has bloggers too. The Abilene Reporter news collects stories from the Associated Press (AP) and has bloggers as well on their online site too. They post videos from other sources just as many websites do. So, what’s the difference? Nothing, just the agenda.

When reading the paper, checking out the latest story on the internet or listening to the radio, what we read and his is not always the complete truth, but it’s not all a bunch of lies either, and maybe , consists simply of partial truths.

The main thing when getting information from the internet as opposed to other sources is not to buy the hype – just about everyone, everywhere repeats what is commonly known and has their opinions about what is seen, read or heard thus tilting the information to fit some kind of agenda which promotes (either directly or indirectly) some business, whether the businesses are private sector companies or public agencies.

I always keep a cash flow statement close to me. So close, it’s not on a computer or piece of paper, rather I keep it in my head.

Cash flow statements in business are easy to understand. Money coming in versus going out. Cash flow on a personal level is easy to understand too. Paychecks coming in, bills taking money out. Either way, business or personal, if more money is in the checking account at the end of the month, the cash flow is positive. If more money is going out than coming in, cash flow is negative and can lead to deficit spending. (I wish Washington would look at their budgets this way. But I guess this is too simple.)

When looking at a house, figuring the math is very simple.

First, I’ll start with buying a house with a mortgage. Typically, a 30-year mortgage is common.

(I won’t use a 15-year mortgage, because I think the 15-year loan is the most risky loan on the market for the average person. Read Barking With The Big Dogs and you’ll see why.)

Let’s start with a $250,000 house and a 20% down payment.

Using a 30-year mortgage, a loan amount of $200,000 at 6% interest runs $1,200 per month. Taxes and insurance vary, but a good, high estimate is 3% for taxes and 1% for insurance on the value of the property.

3% = $7,500 or $625 per month
1% = $2,500 or $208 per month

When combined, taxes and insurance are $833 per month. Add $833 to $1,200 for a total payment of $2,083 per month.

$2,083 / $200,000 is approximately 1%; therefore, look at paying 1% of the loan amount to own a home. Pretty simple.

(Just as an FYI, the percentage will go up with a smaller loan amount, say 1.5% of the loan amount, but the payment will be less over all, which is what is important. With the maximum amount borrowed, say 100% financing, the percentage is just below 1%. So, for conservative estimates, use 1% of the value of the house. Pretty simple.)

You can see a calculator by clicking here for more precise scenarios.

Now, for those who do not want a mortgage, taxes and insurance are payments you will have every month, year after year, so don’t be fooled in thinking you own a home free and clear. Don’t pay the taxes and see who owns your home.

Also, don’t buy the hype that paying cash is the wisest financial decision either. Yes, paying cash has advantages, but not always financial advantages.

Next, did I mention repairs? Nope.

According to a realtor, expect to budget and pay 3% each year for repairs and maintenance. 3% budgets to $625 per month, just like taxes. More if a foundation or roof needs replacing.

Taxes, insurance and repairs won’t go away just because a loan does.

Read Barking With The Big Dogs for more – and easy to understand – information regarding home ownership, money, loans, investing, that is not commonly discussed – but very important financially.