“Many Ways to Accomplish Debt Consolidation”
Hi Joe,
It has been a few years since we have spoken. At the time you handled our home purchase, we need your assistance again. You may recall, we purchased our residence for $440,000 and put $140,000 at the time. We are estimating that the property is now worth nearly $600,000, our current mortgage is down to about $260,000. Our problem is we have about $80,000 in short term debts and are not sure the best direction to go from here. Should we refinance and incorporate our short term debt or take out a second mortgage? Let us know your thoughts.
Jim and Peggy
Even though these clients were high earners, that amount of short-term debt can be a challenge.
Right now, between their current mortgage and their short-term debt they are paying $5250 a month. Truthfully the monthly payment was not an issue for them, but their short-term debt was growing as they were not paying down much principal.
This solution was pretty simple, I am doing a new mortgage for them in the amount of $350,000 amortized over 15 years. Their new monthly payment with taxes and insurance is going to be $3745 and instead of having 22 years remaining on their mortgage they are reducing the term by 7 years and saving about $1500 per month. The added interest deduction certainly helps as none of the credit card interest was deductible.
“Who else do you know that needs my help?”
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