1 Your Name Philip Chen Borrower Name John and Mary Smith 2 Company Address 12345 Main Street 2 Phone City, State, Zip San Jose, CA 95131 111 121 Loan Amount -First Mtg $500,000 Loan Amount $500,000 Minimum Payment Rate 1.00% Fixed Loan Interest Rate 6.500% Payment Schedule Term 30 Loan Margin 2.65% Mortgage Insurance* 0.00 Current Index Value 4.933% 1 80% LTV or Less 0.00 Second or ELOC? 80.1% to 85% 0.43 Loan Amount $0 85.1% to 90% 0.52 Loan Rate 90.1% to 95% 0.78 $77,528 Combined Loan to Value 55.56% 0.00% $0 16.00% Retirement Very Important ! Credit Card Balance Credit Card Rate 401K Match Percentage Second Cash Flow Allocation Cash Flow Allocation 50.00% * Typical Mortgage Insurance Factors * Borrower Information Broker Information Options Loan Fixed Rate Loan Current Value of House Annual Appreciation Rate $900,000 6.0% Home Value Approximate 5 Year Cash Flow First Cash Flow Allocation Second Mortgage or ELOC Investment Return Debt Monthly Apply to Credit Card Debt Investment Strategy ELOC$500,000 1.00% $0 0.00% $500,000 6.500% No $900,000 6.00% $2,148 $3,160 $1,998 Cash Flow $12,152 $3,160 Deferred Interest $15,690 Loan Balance $582,962 $1,858 Cash Flow $13,950 Home Value $1,204,403 $3,160 Deferred Interest $16,291 Loan to Value 48% Loan Balance $567,272 $1,729 Cash Flow $15,622 Home Value $1,136,229 $3,160 Deferred Interest $16,735 Loan to Value 50% Loan Balance $550,981 $1,608 Cash Flow $17,178 Home Value $1,071,914 $3,160 Deferred Interest $17,039 Loan to Value 51% Loan Balance $534,246 Cash Flow $18,626 Home Value $1,011,240 Deferred Interest $17,206 Loan to Value 53% Loan Balance $517,206 Home Value $954,000 Loan to Value 54% Options Payment 30-Year Payment Options Payment 30-Year Payment End of Year 1 End of Year 2 Options Payment 30-Year Payment Options Payment 30-Year Payment End of Year 4 End of Year 5 Options Payment 30-Year Payment Options Payment Calculations -Fixed Rate Loan Amount Cash Flow is calculated by subtracting the total payment for the options loan (including any secondary financing) from the traditional 30-year mortgage. For clarification on how the Options Low Start Rate payment was calculated, see the description above. Loan Analysis Criteria Mortgage Rate Private Mortgage Insurance Home Value Annual Appreciation Rate Options Loan Amount Cash Flow Calculations -The Options Loan Payment has been calculated using the low start rate. Monthly payments for secondary financing (2nd or ELOC) have been added to show the total monthly payment. Minimum Payment Rate Equity Line of Credit ELOC Rate End of Year 3 "Options Loan" vs TRADITIONAL 30-Yr MTG $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Options Loan 30 YR FR@0.00% @1.00% @0.00% @0.00% The ELOC Annual Payments shown above assume an Interest Only Payment for the first 10 years. $0 Options Options Credit Card Normal Investment Year 4 $37,924 Balance End of Year 5 $0 $0 All Payments shown above are total annual payments. Cash Flow is determined by subtracting the minimum "Options" loan payment, including secondary financing, from the Traditional 30-Year Fixed Rate Mortgage payment.$0 End of Year 4 Options End of Year 2 $15,622 $0 $0 $0 $0 $0 Use the Cash Flow to "Boom" any Secondary Financing ! End of Year 1 Loan Balance Year 5 401k Investment Analysis Savings Account Account Account Options Investment Year 1 $18,711 $18,626 $27,939 Year 4 Year 5 Years 6-10 $79,631 $83,712 $77,528 $77,528 $65,376 $66,752 $77,140 $53,706 $51,426 Year 3 $52,214 Year 2 $36,157 $35,804 $0.00 $0.00 $0 $0 $0 $0.00 Year 1 Year 2 $0 Balance End of Year 3 Use the Cash Flow to Pay Off Credit Card Debt Standard ELOC Savings Balance Normal Credit Card Interest End Of Year Balances Second Mortgage Analysis ELOC Loan Balance Options Cash Flow Analysis Annual Options Loan Cash Flow Options Loan Annual Payments $13,950 $189,620 $112,092 $77,528 Put the "Options" Cash Flow to Work for You ! 5 Year Cash Flow Traditional 30 Year Fixed Rate Mortgage Annual Payments Year 2 $17,178 $0 Year 1 Year 3 $37,924 $22,302 $37,924 $19,298 $12,152 5 Year Totals $18,626 $37,924 $23,974 $25,772 $37,924 $20,746 Years 11-15 Years 16-20 Years 21-25 Years 26-30 $88,002 $92,512 $97,253 $102,237 $77,528 $77,528 $77,528 $77,528 $0 $98,064 $116,292 $116,292 $116,292 $116,292 $116,292 Use the Cash Flow for Investing for the Future Year 5 $0.00 $0.00 $0.00 $0.00 Year 3 $0.00 $0.00 The investment scenarios above assume payments into interest bearing accounts for up to five years. After five years, no additional funds are added and the investment grows based on a consistent rate of return. The 401k investment account assumes a 50% company match. Options payments assume maximum annual payment increase with a constant index. Actual results may vary. The Options start rate remains in effect for 1 month. The APR is subject to increase after the loan closes. This is not a commitment to lend. Standard credit card payment is assumed to be 3% of the balance. $0.00 $116,292 Year 41st Mtg 1st ELOC Total Total End of Year Interest Mortgage Mortgage Amount Principal Year Rate Payment Payment Paid Reduction Balance (per Month) (per Month) (Annually) (Annually) (1st Mtg + ELOC) 1 7.583% $1,608 $0 $19,298 ($17,206) $517,206 2 7.583% $1,729 $0 $40,044 ($17,039) $534,246 3 7.583% $1,858 $0 $62,346 ($16,735) $550,981 4 7.583% $1,998 $0 $86,320 ($16,291) $567,272 5 7.583% $2,148 $0 $112,092 ($15,690) $582,962 6 7.583% $2,309 $0 $139,798 ($14,910) $597,872 7 7.583% $2,482 $0 $169,581 ($13,928) $611,800 8 7.583% $2,668 $0 $201,598 ($12,719) $624,518 9 7.583% $2,868 $0 $236,016 ($11,253) $635,772 10 7.583% $3,083 $0 $273,016 ($9,501) $645,273 11 7.583% $5,231 $0 $335,789 $14,333 $630,940 12 7.583% $5,231 $0 $398,561 $15,459 $615,481 13 7.583% $5,231 $0 $461,334 $16,672 $598,809 14 7.583% $5,231 $0 $524,107 $17,982 $580,827 15 7.583% $5,231 $0 $586,880 $19,394 $561,433 16 7.583% $5,231 $0 $649,653 $20,916 $540,517 17 7.583% $5,231 $0 $712,426 $22,559 $517,958 18 7.583% $5,231 $0 $775,199 $24,330 $493,628 19 7.583% $5,231 $0 $837,972 $26,241 $467,387 20 7.583% $5,231 $0 $900,744 $28,301 $439,086 21 7.583% $5,231 $0 $963,517 $30,523 $408,563 22 7.583% $5,231 $0 $1,026,290 $32,920 $375,643 23 7.583% $5,231 $0 $1,089,063 $35,505 $340,138 24 7.583% $5,231 $0 $1,151,836 $38,293 $301,845 25 7.583% $5,231 $0 $1,214,609 $41,300 $260,545 26 7.583% $5,231 $0 $1,277,382 $44,543 $216,002 27 7.583% $5,231 $0 $1,340,155 $48,040 $167,962 28 7.583% $5,231 $0 $1,402,927 $51,812 $116,150 29 7.583% $5,231 $0 $1,465,700 $55,881 $60,269 30 7.583% $5,231 $0 $1,528,473 $60,269 $0 1.00% 4.933% 2.65% The Options Loan Borrower : John and Mary Smith First Mortgage Amount $1,608 $1,729 $1,858 $1,998 Combined Mortgage Payment (per Month) $2,309 $2,148 $2,482 $2,668 $2,868 $3,083 $5,231 $5,231 $5,231 $5,231 $5,231 $5,231 $5,231 $5,231 $5,231 $5,231 $5,231 $5,231 $5,231 $5,231 $5,231 $5,231 Monthly or Bi-Weekly Loan Second Mortgage Amount $5,231 $5,231 $5,231 $5,231 Payment Factor Index Value Loan Margin $500,000 $0 Monthly Prepared by Philip Chen 00 Payments assume maximum annual payment increase each year and assume a constant index. Actual Results may vary. May affect amortization schedule. Interest rates will change. Consult your regulation Z. This is not an offer to lend. Equal Opportunity Lender. For Illustration purposes only.