How We Helped A Local Windsor Couple Save Thousands In Interest

Say Hello to Theo and Sophia.

Like many families living here in the Windsor area, Theo and Sophia are a young couple with two kids who found themselves in financial stress. They have accumulated some debt and were looking for a better monthly payment solution.

Tapping into the equity build up in their home through refinancing their mortgage can be a great option to reduce what could be an overwhelming list of monthly bills. The goal, in this case, is to pay off all debt by consolidating it into one monthly payment, saving them thousands on interest.

The Challenge

The biggest challenge faced by the couple was their credit score, which prevented them from qualifying for a second mortgage at the local bank. Bad credit along with the added new debt may have been perceived as risky for the bank to loan them the money. Their credit scores were 560 and 620, you should maintain a score of 680 or better.

An unavoidable family medical situation put a strain on the family finances, and late bill payments resulted in not so favorable credit.

Here are some tips to help you avoid falling into a bad credit situation:

  • Make your minimum payments on time, every time.
  • Reduce balances and keep them low. The less available credit you’re using, the better. But make sure you’re using your credit cards so they don’t get closed for inactivity. Keep balances below the required limits.
  • Limit your hard inquiries.
  • Make sure your report is free of errors. Inaccurate negative information on your credit report can have a big impact.

Both Theo and Sophia have good and stable jobs that bring in about $80,000 in annual household income. They have about $10,000 in savings plus have no car payments.

How we can help

After disappointing news from their local bank, they called our team to help them with a debt consolidation to repair their credit.

Often banks are unable to provide a solution for some individuals who have experienced a financial setback. With our access to many more mortgage and financing options, a mortgage broker can create a plan that helps couples like Theo and Sophia.

In this case, because each couple and each individual circumstance vary, here is how we plan to help Theo and Sophia:

  • To help build their credit, we will place their mortgage with a “B lender” for one year.
    • A “B lender” is a large, reliable financial institution, tightly regulated by the government. They offer mortgages and loans that are a riskier than “A lenders”. Those who don’t qualify for loans with a local bank or credit union might be able to get approved with a “B lender”. There is greater flexibility when it comes to income and credit requirements, which comes at a price, as these lenders charge a higher interest rate (1-2% higher than the going rate with an “A lender”. Sometimes these rates are better than the bank posted rates).
      When working with a “B lender”, there is also a fee charged, ranging anywhere from (1-2% of the borrowed amount)
  • Once the term is up we will be able to move the mortgage to an “A lender”.
    • An “A lender” is a bank or a credit union who service customers with good credit. They cater to customers with good credit scores and a reliable income.
  • This strategy is a short-term solution that really focuses on the long-term result of offering a better monthly budget and most importantly better financial health for the family.

Theo and Sophia are relieved that there is a solution to their financial situation. They will now have a clean slate and be stress-free.
For our team, offering solutions for couples and individuals who sometimes find themselves in less than perfect financial situations is gratifying.

Can we help you manage your monthly bills better?

Debt consolidation could be an answer for you. Best way to find out is to schedule a consultation with one of our team members to discuss your personal needs.

With a good strategic plan in place, we find that 9 times out of 10 paying out debts, cleaning the credit, and raising the credit scores, Allows our clients to save on monthly overall interest, better the credit, increase their cash flow and sometimes even save their homes.

**Although we changed the names in this article to protect the privacy of our customers, the scenario is based on factual events. If the situation described here sounds similar to your circumstances and you would like to see how we can help you, please call our office to schedule a 15 minute over the phone consult at 510.250.4848

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