27 Apr Debt Cures: Does Kevin Trudeau Make Money or Sense? Part 9: Homeownership
Part9 of my review of Kevin Trudeauâ€™s book, â€œDebt Cures â€œTheyâ€ Donâ€™t Want You to Knowâ€ examines Chapter 14: Home is Where the Start Is.The purpose of the review is to examine whether Trudeau, who has had extensive involvement with credit card fraud and the Federal Trade Commission for some of his previous books, makes any sense in this latest self-help promotion or is he making money selling empty promises.
Trudeau suggests that those consumers who want to pay off their mortgages sooner use any of a variety of techniques. His first two suggestions have merit:splitting the payment into smaller amounts (weekly, semi-monthly or bi-weekly payments) or paying extra on the principal each month.
The next series of suggestions involve borrowing from a family member, paying the loan “points” upfront at the time of the mortgage loan; borrowing money from a 401(k) to pay down the mortgage; make regular additional payments and specify the payment is to go to principal, pre-pay a year’s worth of mortgage payments.
This reviewer cannot endorse any of the above paragraph’s recommendations: borrowing from a family member is problematic; paying the loan points upfront is 20/20 hindsight; a person should always avoid borrowing from their 401(k) and who EVER has the money to pay a year’s worth of mortgage at a time??? (even a modest $600/month mortgage x 12 months = $7200???).
Trudeau goes on to explain that “Prepay is the way”. He recommends a “mortgage accelerator” loan, which is set up to be directly paid from a bank account. Trudeau suggests that the borrower then have paychecks deposited into that account. Any money not used for bills is then transferred to the mortgage loan at the end of the month. He thinks it is a terrific idea.
His next recommendation is the Money Merge Account. It combines your checking/savings with a line of credit. It uses a similar technique as the one above.
Trudeau returns to the importance of the credit score when applying for mortgages. The credit score of the consumer determines the interest rate and even a .5% difference can add up to alot of money over a 30-year loan.
Trudeau next turns to Private Mortgage Insurance (PMI)and avoiding it at all costs. PMI is an insurance policy for the mortgage company to requirefrom borrowers who have low down payments (typicallyless than 20% of the loan). He suggests a borrower should do anything/everthing possible to keep the requirement of PMI off their loan. Trudeau also suggests that as equity buildsupover the life of the loan, that the borrower stay vigilant and ask forproperty appraisals, so that when the borrower achieves that 20% equity to loan ratio, the PMI can be dropped.
Don Taylor, one of the editors at bankrate.com, advises against the mortgage accelerator loan for those who are not financially disciplined, since you are, in fact, using the line of credit to pay bills (and therefore could increase the amount of debt owed each month, rather than decrease the mortgage).
Overall Grade – D-
- Part 1 of my review examines the first three chapters of Kevin Trudeau’s book, Debt Cures They Don’t Want You to Know. (gets an “okay” rating)
- Part 2 of my review dissects Chapter 4 of the book (gets a warning of “Get legal advice from a lawyer in your own state”).
- Part 3 of my review deals with Chapter 5 of the book (gets a warning of “Get legal advice before following Trudeau’s advice”)
- Part 4 of my review examines Chapter6, as Trudeau discusses how to cut your credit card rate. (gets a “doesn’t hurt to try it; don’t expect it”).
- Part 5 of my review examines Chapter 7: Fighting Back. (gets an okay rating).
- Part 6 of my review examines Chapters8-11: Credit Score (gets “good information”)
- Part 7 of my review discusses Chapter 12: Credit Reporting Errors (gets mixed review as he repeats bad information (discussed earlier in Part 3) but generally good information).
- Part 8 of my review examines Chapter 13: Student Loans (gets generally good review)
- Part 9 of my review discusses Chapter 14: Home is Where The Start Is (gets nearly failing grade)
- Part 10 of my review examines Chapter 15: No Bankruptcy (gets failing grade/adds shame)
- Part 11 of my review examines Chapter 16: Big Business (credit card industry)(gets A grade for giving information)
- Part 12 of my review discusses the information presented in Chapter 17: Stealing Candy from Babies (gets okay rating for giving information)
- Part 13 of my review examines Chapter 18: Three Ring Circus (gets failing grade for repeating information already provided)
- Part 14 of my review examines Chapter 19: Slaying the Dragon (gets A grade for giving the math on how long it takes to pay off a 20% credit card with a balance of $8000 with just minimum payments….FIFTEEN YEARS!!!
- Part15 of my review examines chapter 20: Stopping Debt Collectors Cold (gets a failing grade for some good information and then followed by really bad advice: scary!)
- Part 15B of my review goes into more detail about what was scary about Chapter 20.
Latest posts by Karen Oakes, Esq. (see all)
- When Consumers Get Notices About A Business’s Bankruptcy — When You Are Suddenly A Creditor. - March 7, 2018
- Bankruptcy Attorney Named by Trump as Ambassador to Israel - December 23, 2016
- Truth or Consequences: The Department of Justice in Bankruptcy Court (updated for 2016) - March 5, 2016
- Honesty? Is Honesty Honestly The Best Policy In Bankruptcy? - January 22, 2016
- How to Discharge Your Student Loans In Bankruptcy! Yes, It Can Be Done! - July 25, 2015