From saving their homes to keeping an extra $1,000 per month in their pockets, these homeowners are now believers in the power of refinancing.
by Lee Nelson
Owning a home is that American dream that so many people cherish. But life happens. And sometimes, those homeowners need to refinance to save their home from being foreclosed, or they need to consolidate other debts so they aren’t house poor anymore.
Whatever the situations are that people find themselves in, lenders are helping them find their way into a new loan that makes life a little easier.
Four lenders from coast to coast talk about their most recent, dramatic refinance stories. There are some remarkable scenarios, some tear jerkers, and some big changes in people’s lives and finances. Maybe through their stories there will be lessons to be learned about finding the right lender and understanding the power of refinancing.
Widower On the Brink Saves Her Home
Last year, Travis Saling helped a Los Angeles widower who was really at her breaking point financially.
“She was going to the soup kitchen and having neighbors stop by to help her get through the week. She told me she didn’t have heat because she couldn’t afford to fix the heater,” says Saling, mortgage loan officer at Team Home Loans in San Diego.
The woman had very bad credit because of the lack of funds to pay bills, and she was constantly being denied by lenders to help her.
“I explained to her what a reverse mortgage was and she decided to give it a try. She was going to lose her home if we were unsuccessful on the refinance,” he says.
Once the appraisal came back, it was clear the house was not in lendable condition due to the amount of items throughout the house. Saling hired a clean-up crew of four people that spent eight hours clearing the house of junk and taking two trips to the dump. The appraiser went back in and got the results that Saling needed.
“She got the reverse mortgage and paid off her current lender and stopped the foreclosure process,” he says. “It was a very hard loan to get, but I have not had a more rewarding experience in my career.”
This Guy Hadn’t Paid Taxes in Three Years – but Came Out on Top
Ryan Hoffman had a client walk in the door who was in a big financial problem. He hadn’t filed taxes in three years and needed to refinance his $600,000 mortgage.
‘We coordinated with his tax preparer to not only change his monthly payment but get him out of an interest-only loan that would have skyrocketed without a refinance,” says Hoffman, senior loan officer at Wholesale Capital Corp., in Moreno Valley, Calif.
Hoffman also helped the man’s CPA cut out $12,000 in unnecessary taxes.
“If the government is going to back your mortgage, they want to know you have the income to support the payment. They only know you have the income if you pay taxes on that income,” he says.
An Extra $767 a Month? Don’t Mind if I Do.
The new mortgage payment for Anthony VanDyke’s client won’t be going down that much with his new cash out refinance loan. His payment was $1,200 and will go down to $1,140.
“However, we are taking $21,000 cash out to pay off his auto loan, a small home equity line of credit and two credit cards. The savings of $767 per month equals 26 percent of his take home pay after payroll deductions or 20 percent of his gross pay,” says VanDyke, president of ALV Mortgage in Salt Lake City.
“This borrower makes $46,000 per year or $3,800 a month. The refinance equals a significant amount of monthly savings for this borrower,” he says.
He Kicked Mortgage Insurance to the Curb – a Saved a Grand a Month
One of Bishoi Nageh’s clients in Basking Ridge, N.J., purchased a home for $675,000 a few years ago. He had put down 10 percent with an FHA loan at 4.5 percent. That left him with a $600 a month FHA mortgage insurance premium.
About 1 ½ years later, this client told Nageh that the house down the street sold for $770,000. Prices of homes were increasing slightly across the nation.
“We thought why not give it a shot. But I thought the odds of his house being worth more was unlikely, but who knows,” says Nageh, vice president of Mortgage Network Solutions in Somerset, N.J.
So, he got the appraiser out there to check it all out to see what this client’s home might be priced at to be refinanced. Lo and behold, it was appraised at a whopping $810,000.
With refinancing to a new 30-year loan and dropping his interest rate to 3.5 percent, this client was able to get rid of his mortgage insurance completely and save nearly $1,000 a month overall. His monthly principal and interest was at about $3,000. Before with the high mortgage insurance, his bill was over $3,900 monthly.
It’s true that these four cases are extraordinary. But ordinary homeowners everywhere can save a significant amount of money by refinancing. Contact us to get started on your home refinance to see how much you can save.