These are real clients of mine. He originally told me he had spoken to several lenders, mortgage brokers, his CPA and his father (Also his Life Insurance Agent). Everyone told him that they were in the best shape they could be unless they earned more money, or unless interest rates dropped again. Let’s look at it together and see what options they had…. 

The couple: HE’S 48 YEARS OLD EARNING $55,000 A YEAR
SHE’S 45 YEARS OLD MAKING $38,000 A YEAR…
TOTAL $93,000 /12= $7,750
HOME VALUE $575,000 Property Taxes = $510.42 a month & Insurance $125 a month
1ST MORTGAGE $315,000 3 Years into a 30 year fixed mortgage @ 3.75% = $1,458.81
2nd MORTGAGE $ 55,000 3 Years into a HELOC INTEREST ONLY @ ½ over the 3.25% Prime Rate = 3.750% = $171.88 a month. At the year 10 mark, that interest only payment goes to a
Fully Amortized Payment of $326.09 IF the prime rate stays the same. 

They told me that they traded in his 1996 Ford F250 p/u with 214,000 miles, for the Purchase of an almost new 1 ton Chevy work truck, almost 1 &1/2 years ago. Paid $45,000, $15-k in cash down & traded his old truck that he owned free & clear, got $5,000 trade value and financed the balance of the purchase $29,636.25, over 60 months, @ 7% = $586.83. Currently he owes $21,803.91 

Not long after that they traded her 2004 BMW 525I, with 121,000 miles, in and got $8,000 for the car that she owed $3,000 on. They purchased her new Honda car for $26,000 and financed the balance of $23,645, over 48 months, @ 4.5% which made the payment $539.10. 

She had a deferred student loan of $15,000 with no payment, yet, but when she stops going to school next June, the payment will be $245.07 a month, for 72 months - 6 years. 

Although they are a cash & carry family, they used a little on the credit card to repair her BMW about a month or so before they traded that car in. Then they had a dishwasher explode and ruin the kitchen floors, so they built up an $8,600 credit card balance. The zero % interest for 6 months just blew up, and now, although their minimum monthly payment is only $215 a month, they are being charged 12% on the money. If they keep making the minimum payment, it will take them over 5 years to pay it back.
By the time we worked their budget, it looked like this…. 

$7,740 Gross Monthly – 28% Income Taxes… = $5,580 Take Home. 

$3,216.69 Minimum Payments Including the Student loan but Before Adjustments for the HELOC *
510 Prop Tax
125 Homeowners Ins.
160 Auto Ins.
59 Term Ins. On him
50 Term Ins. On her
325 Fuel
190 PG&E
160 Cell Phone
45 Water
45 Trash
350 Market / Groceries
260 Coffee each morning for each of them during the week
436 One Dinner out a week

-------------------------
$5,931.69 Out Go….

They said they wanted stay in their home. They said they didn’t want to pull any cash out, but their goal was to make ends meet a little easier each month, and if possible, save some money to have for their retirement. 

Option 1. Consolidate everything into one new 15 year loan and lower their *credit expenditures down to
$3,199.78 per month. That would pay their home off 12 years earlier and saved them over $463,000
of interest charges. Which would also relieve them of the Student Loan payment that they had not
yet started to pay on. It would also remove the strong likelihood of their HELOC payment increasing, when it would have gone fully amortized. AND, it would raise their credit score when we
consolidated all their debt. All interest being paid, now Tax Deductible! 

Option 2. Consolidate everything into one new 20 year term loan, saving them $578 per month! It would pay their home off 7 years earlier, save them $260,000 of interest charges. And again, would also relieve
them of the Student Loan payment that they had not yet started to pay on. It would also remove the
strong likelihood of their HELOC payment increasing; when it would have gone fully amortized.
It would also raise their credit score when we consolidated all their debt. All interest being paid, now
Tax Deductible! 

Option 3. Consolidate everything into one new 30 year mortgage, but make a 27 year payment, thus lowering their monthly out go $962 each month! Their home would get paid off just as quickly as before,
however they would still save thousands of dollars in Non-Tax Deductible Interest Charges, eliminate
the Student Loan Payment, Eliminate the likelihood of the HELOC payment increase, and again Raise
their credit score once everything had been consolidated. 

THEY OPTED FOR #2 AND AT THE END, THEY WILL OWN THEIR $575,000 HOME FREE & CLEAR, THE DAY THEY RETIRE, SEVEN (7) YEARS EARLIER!!! 

EVEN IF THE HOME HAS ZERO APPRECIATION, THEY HAVE $575,000 IN EQUITY AND THEY SAVED $260,000 OF INTEREST CHARGES 

-AND- 

IF THEY STICK TO THEIR CURRENT PLAN THEY WILL ALSO HAVE OVER $138,720 IN THEIR RETIREMENT ACCOUNT. 

If you are tired of working hard to stay even, if you have a desire to do more, perhaps buy a home, or even buy another home, perhaps it’s time to see if a money mechanic can help. 

Even if you have been told “NO” before, I may be able to help!

No Point, No Fee Programs Available.