1. Getting Your Financial House in Order
Hello, my name is _______. I’m a _______ , as well as a Member of The Society for Financial Awareness, commonly referred to as SOFA. We’re here as a 501(c)(3), with a Mission of ending Financial Illiteracy across America, one community at a time!
Today we will be talking about Getting Your Financial House in Order.

2. WE WOULD LIKE TO WELCOME YOU TO TODAY’S WORKSHOP
Thank
You for
joining us!
Our hope today is to provide you with some valuable information, have some fun, and enjoy this next hour.
Most importantly, I’d like to welcome you to today’s workshop.
In this next hour, it is our sincere desire to provide you with some really interesting and informative information that should provide you with a lot of answers in your journey of your Financial Plan.
Feel free to use the back of your Program Evaluation for notes. As to any questions that might pop up, please feel free to ask at any time during the presentation, so you don’t forget.
2016 | The Society for Financial Awareness

3. EVALUATION FORM
Please review this form. I will be picking these up at the end of the workshop.
Do note – the backside is to be used for your specific questions and issues.
Pass out the Evaluation Form now and explain the Complimentary Consultation.
* Do note – this slide follows the welcome slide.
2016 | The Society for Financial Awareness

4. Using Sound Financial Principles
Make decisions with a firm commitment to:
• Eliminate debt
• Put your money to work for you
• Accumulate wealth
Using Sound Financial Principles
2016 | The Society for Financial Awareness

5. Taking advantage of temporary rate disparities, interest arbitrage is buying interest bearing notes on different exchanges simultaneously.
• Transactions typically involve trading currencies from two different countries 
• The trader assumes any of the risk associated with exchanging foreign currency
Interest Arbitrage
2016 | The Society for Financial Awareness

6. Buying Your First Home Types of Mortgages Fixed Rate Mortgage
Adjustable Rate mortgage
Full Amortized Adjustable Rate Mortgage (ARM)
Buying your first home is probably the most important investment you'll ever make, and selecting the right type of mortgage is an important part of getting your financial house in order.
Buying Your First Home
2016 | The Society for Financial Awareness

7. Fixed Rate Mortgages
Fixed rate mortgages have a constant interest rate and monthly payment amount, over the term of the loan. 
Payments are calculated to payoff your balance by the end of the term 
30 year fixed rate mortgages are the most common type of mortgage
* Shorter-term, fixed rate mortgages often have lower interest rates.
2016 | The Society for Financial Awareness

8. Adjustable Rate Mortgages
Unlike fixed rate mortgages that have the same interest rate over the time, adjustable rate mortgages offer an initial period with a fixed interest rate, that's often lower than a conventional mortgage. Initial monthly payments are lower, and following the initial period, the interest rate is calculated annually.
While an adjustable rate mortgage is not for everyone, it may be an option for financing your home under certain circumstances.
Adjustable Rate Mortgages
2016 | The Society for Financial Awareness

9. Fully Amortized Adjustable Rate Mortgage (ARM)
The most common type of adjustable rate mortgage
Monthly payment are calculated to payoff the balance at the end of the term, typically 30 years
When the initial fixed interest rate period expires, your interest rate and payment adjusts according to specific rules
A Fully Amortizing ARM typically has an interest rate cap
2016 | The Society for Financial Awareness

10. Fixed Rate Mortgages: Advantages
• Payments remain the same, making it easy to stick to a monthly budget
• No risk of interest rate increases over the term of your loan
• Provides a sizable deduction on your federal tax return
Fixed Rate Mortgages: Advantages
2016 | The Society for Financial Awareness

11. Adjustable Rate Mortgage: Advantages
Initial monthly payments are lower
More affordable with a principal reduction
Can save you money if you plan to sell the home before your initial interest rate period ends
You may be able to qualify for a higher loan amount and buy a larger, more expensive home
If interest rates remain low, the overall cost of your mortgage is less than a traditional, fixed rate mortgage
2016 | The Society for Financial Awareness

12. Adjustable Rate Mortgage: Advantages
Type of ARM
Number of Months w/Fixed Interest Rate
10/1
120 month fixed; adjusts annually for the remained of the term
7/1
84 months fixed; adjusts annually for the remainder of the term
5/1
60 months fixed; adjusts annually for the remainder of the term
3/1
36 months fixed; adjusts annually for the remainder of the term
2016 | The Society for Financial Awareness

13. Adjustable Rate Mortgages: Important Things to Consider
If interest rates increase after your initial fixed rate period, your monthly payments increase
Your increases in income may not keep pace with interest rate increases
Since you pay less interest, your federal income tax deduction is typically lower than with a fixed rate mortgage
Prepayment penalties are often assessed for paying off your loan early
A prepayment penalty may be assessed if you sell or refinance the home before paying off your mortgage
2016 | The Society for Financial Awareness

14. 30 Year Fixed Rate Mortgages: Example
Loan
Interest
Total Payment
• A Closed-end loan (homebuyer cannot change number or amount of payments)
• Money Goes In & CANNOT Come Out
Principal loan amount $200,000 Interest rate %
Monthly payment $1,199
30 years x 12 months                                           x360 Total repayment $431,640
Principle Loan Amount        -$200,000 Total Interest Paid $231,640
30 Year Fixed Rate Mortgages: Example
2016 | The Society for Financial Awareness

15. How Amortized Loans Work
Principal Loan Amount $200,000
Interest Rate %
Monthly Payment $1,199
Years
Principal
Interest
Balance
Equity
Payment
(1st Month)
$199.10
$1,000
(2nd Month)
200.10
999
1 Year
210.33
988.77
197,543
2,457
14,389
5 Years
267.22
931.88
186,108
13,891
71,946
10 Years
360.44
838.66
167,371
32,628
143,891
21 Years
696.23
502.87
100,573
99,436
300,974
Total Repayment at the end of the 30 year term =  $431,677
2016 | The Society for Financial Awareness

16. Example Cont’d Amortized Loan With Principal Reduction
*Savings in Interest: $23, (based on $5,000 extra principal payment on the 1st payment  of the loan) 
Principal loan amount $200,000 With principal reduction $5,000
Interest rate %
Monthly payment $1,199
Actual Savings $27,579.30
(23 payments of $1,199.10)
Example Cont’d
2016 | The Society for Financial Awareness

17. Save by Making 1 Extra Payment Per Year
Making just one extra payment could save you thousands of dollars and a few years worth of mortgage payments. 
The question is:
Will you make the extra payment? Tracking your progress is good motivation!
Save by Making 1 Extra Payment Per Year
2016 | The Society for Financial Awareness

18. Saving Through Bi-Weekly Mortgage Payments
What are bi-weekly mortgage payments?
Since there are an average of 4.3 weeks in one month, paying half your monthly mortgage payment every two weeks gets you ahead on your loan.
Similar results as the extra payment per year
Locks you on track to save money on the overall cost of your mortgage
Saving Through Bi-Weekly Mortgage Payments
2016 | The Society for Financial Awareness

19. Managing the Equity You Build in Your Home
As long as your yield, or rate of return is higher than the net rate of your loan, you can be debt free on paper utilizing the following:
Mutual Funds
Stocks
Other cash investments
Goal: Mortgage Balance- Investment Balance
At 6% your money can double in 12 years
At 12% your money can double in 6 years
*The Rule of 72 applies to compound interest and doubling time
2016 | The Society for Financial Awareness

20. Strategic Use of Your Tax Return
Through the mortgage interest deduction on your federal tax return, you should get a sizable amount returned. Use it strategically:
• Pay down debt
• Make investments
• Use your tax refund to offset you mortgage payments next year
Strategic Use of Your Tax Return
2016 | The Society for Financial Awareness

21. Use Your Tax Return Wisely
• A tax refund of $4,000/12 months = $ toward each monthly mortgage payment 
• If your payment = $1,199, use the interest you paid (and got back) to reduce your monthly mortgage payments to $865.67
Offset Monthly Mortgage Payments
• Mutual Funds
• Other cash investments
Make Investments
• Pay down one debt at a time
• Use the money you save to pay down the next debt
Pay Down Debt
2016 | The Society for Financial Awareness

22. Utilizing the Equity You Build in Your Home
• Home Equity Line of Credit
• Home Equity Loan
• 2nd Mortgage
Utilizing the Equity You Build in Your Home
2016 | The Society for Financial Awareness

23. Utilizing the Equity You Build in Your Home
A home equity line of credit is open-ended:
Money goes in
Money can come out
Interest is charged on the average daily balance
Home equity loan is not a line of credit– use it to:
Buy a second home
Build a second home
Make improvements to your first home
2nd Mortgage:
Fixed Rate
Works the same as your original mortgage
2016 | The Society for Financial Awareness

24. Example Using a Home Equity Line of Credit (HELOC)
Total of 1st Mortgage $200,000 Pay from HELOC ,000
New total on 1st Mortgage $195,000
HELOC Balance $5,000
*Total debt amount is the same
Example
2016 | The Society for Financial Awareness

25. Advantages of Using a HELOC
Takes advantage of the bank's money
Total debt remains unchanged
No savings used
Advances your amortization schedule
Cancels interest
2016 | The Society for Financial Awareness

26. Understanding Financial Principles
Utilize the financial principles in this presentation to:
• Eliminate debt
• Put money to work for you
• Accumulate wealth
Understanding Financial Principles
2016 | The Society for Financial Awareness

27. Please take a moment to complete. I will be collecting these
EVALUATION FORM
Please take a moment to complete. I will be collecting these
in a moment.
If you need a pen, please let me know.
Now is the time to promote the Evaluation Form and Complimentary Consultation.
* Do note – this page is the 2nd to the last slide of your presentation.
2016 | The Society for Financial Awareness

28. Thank you for your time! Please complete your Program Evaluation.
We will be picking them up shortly.
Now would be a good time for me to answer
any particular questions you may have.
IMPORTANT: This is where you move from the front of the room, to the back by the door.
This strategic location is where you will be picking up your Program Evaluations from your Attendees, who will be met by you at the door they’re leaving from. 28