Sally and her partner purchased a condo a number of years ago with a very low rate mortgage. With only a few years left, they were hesitant to look into new mortgage options, but decided to take their financial advisor’s advice and contact Paul Jaimes, Loan Officer at First Centennial Mortgage.
On the surface, it didn’t seem like a refinance would make sense. As Sally and Paul talked through their financial scenario, Paul found that the pandemic had significantly impacted their current incomes in a negative way. Sally was forced to take a 50% pay cut, and her partner, who is self-employed, had her business come to a screeching halt in March when the pandemic began.
While they were lucky to have saved enough money to weather the storm, they were obviously very concerned about their current cash flow situation since no one knows how long the pandemic will last or how long their income may be impacted.
Things didn’t look promising, but after looking at their financials, Paul was able to find a solution that fit their short-term and long-term financial goals. They were able to set up a new 30-year fixed mortgage at a lower rate than they had on their current mortgage. The new amortization, at the lower rate, decreased their monthly payment significantly, giving them some much needed breathing room on a monthly basis. Despite the temporary decrease in their monthly income, they were able to qualify for the 30-year mortgage. This enables them to make the smaller payment until their incomes are back to a level where they can begin making their pre-pandemic payment amount in order to pay off their mortgage over the next few years, putting them back on schedule.
This is a perfect example as to how a mortgage refinance can be utilized as another financial tool. Give us a call today to find out if refinancing may benefit your finances.