Alice got her cake and ate it too…

Alice (name is changed) ran one of my favorite Sweet Mortgage Deal strategies. I call it the “Get Your Cake and Eat it Too Strategy.”

Here’s how it worked: Leslie called me and wanted to discuss using her equity to consolidate what some would consider a lot of debt. But she had a couple of roadblocks.

1. Because she had a lot of debt, her credit scores were lower.
2. The lower credit scores were making her new mortgage proposal priced quite a bit HIGHER than a regular refinance. Had her credit been better, she could’ve gotten a better rate. But alas…

So, I suggested we look at “Getting Your Cake and Eating it Too” strategy.

The first thing we focused on was monthly budget. How many of those debts could we roll into a new mortgage, and how would it affect her monthly budget?

Turns out, her monthly budget changed by a whopping 700 dollars a month by consolidating. Can you imagine her excitement?

But we didn’t end there. I recommended one more piece, which opened the door for “Cake” strategy. And that was to do a no-cost refinance (that’s where you take a little bit higher rate and get rebates to cover the closing costs).

Essentially, I did not want her to pay much or anything for this debt consolidation refinance. Why you might ask?

Well, I knew that there was a good possibility that if she paid her consumer debts down to zero with her new mortgage, that her credit scores would jump in a few months. Then, in six-seven months, if the scores were higher, we could turn around and do ANOTHER mortgage with potentially better terms.

Now, to guard against the potential of higher rates down the road, we made certain that the first refinance would work nicely should she end up keeping it for the long term.

So the first loan closed, her debts were consolidated and her budget got that sweet sweet relief.

Time marched to six months later and I gave her a call. Sure enough, her credit scores jumped significantly! I priced out a new mortgage for her and two things happened that made her ecstatic:

1. Her credit scores were higher, giving her a better rate on a new refi
2. Her new loan was NOT a cash out loan this time, it was a regular ol’ rate and term refinance (which has even better pricing).
3. The new loan was reducing her payment by ANOTHER 200 dollars.

The strategy saved her a WHOPPING 900 dollars a month after all was said and done!

How happy was she? Hard to describe how good it feels to get a Sweet Mortgage Deal.

Hard to describe how good it feels to get a Sweet Mortgage Deal.

About Post Author

Darin Rhodes

A bio is a funny thing, they’re usually written in the third person as if a journalist surprised you one morning ringing your doorbell. “What, you want to interview ME?”

The cold, hard truth is our business interest in each other really comes down to one thing: “can this person help me get what I want?”

In that spirit, my most basic hope, coupled with my deepest desire, is the products, service, knowledge, and experience I have acquired over the years can be laser-focused on one thing: helping you get what you want.

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