THE SCENARIO:
“John and Jane Smith” were proud of their 3.25% mortgage rate. However high inflation and the poor economy had taken a toll on their budget. Their income was declining, their expenses were rising, and they found themselves using credit cards to close the cashflow gap.
THE PROBLEM:
When the Smiths came to me, they were hoping a home equity line of credit (HELOC) could help consolidate their debt. But their budget couldn’t support the required payments during the HELOC’s 10-year draw period. A fixed-rate home equity loan was another option – but it wasn’t the best option.
THE SOLUTION:
I recommended a cash-out refinance to consolidate all their debts into one manageable monthly payment. Initially, they resisted—understandably hesitant to give up their “great” 3.25% mortgage rate.
So I showed them the numbers.
We compared their current payments—including their mortgage, credit cards, and other debts—plus the monthly shortfall they were adding to their credit cards. Then we looked at the payment they’d have with a new mortgage at today’s higher rates. The result? A lower monthly payment, improved cash flow, and a path to financial stability.
Even better, I showed them how—once their finances stabilized—they could make extra payments toward the new mortgage and still pay it off in the same timeframe as their original loan. All while spending less each month than they were before.
Their financial advisor agreed. The plan made sense. And the financial pressure was lifted.
BOTTOM LINE:
Too often, people approach financial decisions emotionally. It’s human nature. But when you work with a knowledgeable and creative Certified Mortgage Planning Specialist®, you gain access to solutions that go beyond the obvious.
If you’re feeling financial pressure, let’s talk. There may be a smarter way forward.
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Warren Goldberg is President of Mortgage Wealth Advisors, a Certified Mortgage Planning Specialist®, and a published author. His interviews include Blog-Talk Radio, Newsday, The Daily News, Anton Press, and the Long Island Herald. Since 1992, he’s been sharing his financial knowledge and wealth-building strategies, including how to properly use your mortgage as a financial tool. His clients regularly express their trust and appreciation by recommending friends and family call when in need of mortgage, real estate, and financial guidance.
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