Note: This Product is no longer available. Please contact 719 Lending for additional options.

Principal First Mortgage: All in One Loan – AIO

Mortgage interest incurred on a loan can almost be as much as the amount borrowed. When considering a Principal 1st Loan, it’s important to account for closing costs, which typically range from 2% to 5% of the loan amount. The Principal 1st Loan is a solution. By combining banking functions with home financing into one dynamic instrument, borrowers may be able to reduce the interest they pay by tens of thousands of dollars and cut years off their loan.

Advantages of the Principal 1st Loan

• Save thousands in interest
• Reduce your loan balance faster
• Ability to finance new home purchases or refinance current mortgages
• Direct deposits are applied to the principal, which lowers your outstanding daily balance and interest
• Less money spent on monthly mortgage interest means more money available to make extra principal payments and pay down your balance quicker
• Understanding your monthly mortgage payment helps you manage your finances more effectively and take advantage of the Principal 1st Loan’s features
• Access to home equity without having to refinance
• Comes with ATM cards for all account users, plus secured online bill-pay, unlimited check writing, and bank-to-bank wire transferring

Understanding Mortgage Principal and Interest

Understanding the components of your mortgage payment is crucial to managing your finances effectively. Two key elements of your mortgage payment are principal and interest.

Definition of Mortgage Principal

Mortgage principal refers to the amount borrowed to purchase a home. It is the initial amount of the loan, and it does not include interest or other costs associated with the loan. The principal is the amount that you, as the borrower, are responsible for repaying to the lender.

Definition of Mortgage Interest

Mortgage interest, on the other hand, is the fee charged by the lender for borrowing the principal amount. It is calculated as a percentage of the outstanding loan balance and is typically expressed as an annual percentage rate (APR). The interest rate can vary depending on the type of mortgage and market conditions.

**First Lien HELOC: Unlocking Your Home Equity**

Lower your home loan principal faster and save tens of thousands of dollars in mortgage interest. Your mortgage lender plays a crucial role in managing your loan balance and applying payments towards interest and principal. With a Principal 1st HELOC, you have more control over your loan balance and interest costs. Plus, you can enjoy flexible access to your home equity for 30 years without having to refinance.

Introducing the Principal 1st Loan

*Not just another loan, but a solution to paying too much monthly mortgage payments*

What makes the Principal 1st Loan, offered by 719 Lending so powerful is that it isn’t a standard closed-ended mortgage, but instead, a home equity line of credit. Lines of credit are unique because they are flexible, two-way instruments allowing you to apply for as much money as you desire toward the balance without losing access to your funds. The Principal 1st provides 30-year access to home equity dollars, and no hidden fees or required balloon payment.

Additionally, the Principal 1st Loan works just like an ordinary checking account. Home finance and personal banking are bundled together!

This revolutionary design allows you to use your everyday cash flow to offset your loan balance and save mortgage interest without requiring a change to your budget.

The Principal 1st Loan allows you to manage your principal and interest payments more effectively, reducing the overall interest paid over the life of the loan.

Deposits made into the Principal 1st Loan pay down principal first and remain available 24/7 through the banking features. The loan comes with ATM cards for all users of the account, secured online bill-pay, unlimited check writing, direct deposit, and bank-to-bank wire transferring. Your monthly interest payments are computed on each day’s ending balance, so even as you withdrawal money from your account for regular expenses, your loan’s daily balance is kept lower for longer – and that equates to less interest being charged than with a traditional mortgage.

In effect, you avoid having to pay more interest on your loan using your regular cash flow than what you could typically earn on those dollars in a regular checking account. Less of your money spent on monthly mortgage interest means more of your money left over to help you meet other financial objectives.

Principal 1st Loan Details: Managing Principal and Interest Payments

• 30-year term home equity line of credit with 30-year draw access
• Embedded checking account with 24/7 banking access to a line of credit and funds
• ATM debit cards, unlimited check writing, and online bill-pay and statement are included
• 20% down payment requirement for purchases
• Purchase and refinance transactions allowed
• Primary, Second Homes, and Non-Owner occupied homes
• Product availability may be geographically limited
• Other guidelines apply
• Interest paid on mortgage loans for purchasing, building, or enhancing primary and secondary homes may be tax-deductible, providing additional financial benefits

Mortgage Payment Structure Explained

A mortgage payment typically consists of four components: principal, interest, taxes, and insurance (PITI).

PITI: Mortgage Payment Components

1. Principal: A portion of each mortgage payment is dedicated to repayment of the principal balance.
2. Interest: Interest is the lender’s reward for taking a risk and loaning you money. The interest rate on a mortgage has a direct impact on the size of a mortgage payment: Higher interest rates mean higher mortgage payments.
3. Taxes: Real estate or property taxes are assessed by government agencies and used to fund public services such as schools, police forces, and fire departments. Taxes are calculated by the government on a per-year basis, but you can pay these taxes as part of your monthly payments.
4. Insurance: Insurance payments are made with each mortgage payment and held in escrow until the bill is due. There are two types of insurance coverage that may be included in a mortgage payment: property insurance and private mortgage insurance (PMI).

By understanding the components of your mortgage payment, you can better manage your finances and make informed decisions about your mortgage.

Example of an All-in-One Mortgage

Dan needs a $400,000 mortgage at 6%. Dan’s monthly mortgage payments include not only the principal and interest but also property taxes and insurance, which are essential components to consider when managing his mortgage expenses. He has a net monthly income of $7,000. If he does a conventional 30-year fixed loan, his monthly payment will be $2,398. After all expenses, such as day-to-day living, the mortgage, etc., he will be able to save $1,000 per month. But if he uses an all-in-one, or “offset,” mortgage, the $1,000 per month he saves will be used to reduce the mortgage balance for interest payment calculations as well. as explained by Investopedia