Financial Restructuring

Tiersha · ‎04-03-2023

I want to financially restructure. Everything is a numbers game right?

2 part equation

Part 1

1 mortgage loan (currently 29-30% equity) 28.5 yrs left

1 heloc

Dell

John deere

Discover

Chase

Auto

Signature loan

I'm considering refinancing the house that includes all of the above into 1 payment. From the Heloc down is 62k (equity would cover that with zero equity left over)

I have 4 other cc at zero balance. No recent purchase on any of the cards.

Home int 30 yr @3.75%

Auto 2.99

Signature 12.99 due to interest rate increase

Heloc was 5.99 but has gone up

Cc 24 and 27%

Dell I really don't know lol

John deere 22%

It's hard in my head to incorporate the lower interest of home and auto and change it to today's interest rates of what I suspect will be 7% but after crunching numbers this is what it will do.

1. An extra $657 monthly in pocket

2. 30 yr mtg to 20 at 7% (vs current 30 yr)

3. 1 freaking payment (Nice and convenient)

4. All loans (except mtg), cc and lines of credit pd off.

The $ ea month back in my pocket is almost a wash when it come to interest pd at end of 20 yrs.

Part 2

1. I have checking and savings at 2 diff institutions and would be willing to consolidate all with auto pay to 1 bank

2. Not that I have any intention of using it but I do have a free and clear lot with power, septic and the start of a home.

3. In my head I would rather sell the property out right vs attaching it as collateral on a 20 yr. This piece of Property is my future down payment for storage units or other money investment.

None of this Inc the $400 rent I receive now or the addtl $400 that will start in 2 months and has never been used to calculate my yr wage.

What would you do? I am leaning towards US Bank as My local cu is worthless for business purposes.

I will maintain my job but at same time have enough freedom to start my own business and get it going.

My 1 big downside is my cc debt which lowered my middle 2,4,5 mtg score from 701 to 653.

Ps, no late payments except for Nov/Dec 2019, that's the only derogatory.

VAMortgageGuy · ‎04-03-2023

@Tiersha wrote:
I want to financially restructure. Everything is a numbers game right?

2 part equation

Part 1
1 mortgage loan (currently 29-30% equity) 28.5 yrs left
1 heloc
Dell
John deere
Discover
Chase
Auto
Signature loan

I'm considering refinancing the house that includes all of the above into 1 payment. From the Heloc down is 62k (equity would cover that with zero equity left over)

I have 4 other cc at zero balance. No recent purchase on any of the cards.

Home int 30 yr @3.75%
Auto 2.99
Signature 12.99 due to interest rate increase
Heloc was 5.99 but has gone up
Cc 24 and 27%
Dell I really don't know lol
John deere 22%

It's hard in my head to incorporate the lower interest of home and auto and change it to today's interest rates of what I suspect will be 7% but after crunching numbers this is what it will do.

1. An extra $657 monthly in pocket
2. 30 yr mtg to 20 at 7% (vs current 30 yr)
3. 1 freaking payment (Nice and convenient)
4. All loans (except mtg), cc and lines of credit pd off.

The $ ea month back in my pocket is almost a wash when it come to interest pd at end of 20 yrs.

Part 2

1. I have checking and savings at 2 diff institutions and would be willing to consolidate all with auto pay to 1 bank
2. Not that I have any intention of using it but I do have a free and clear lot with power, septic and the start of a home.

3. In my head I would rather sell the property out right vs attaching it as collateral on a 20 yr. This piece of Property is my future down payment for storage units or other money investment.

None of this Inc the $400 rent I receive now or the additional $400 that will start in 2 months and has never been used to calculate my yr wage.

What would you do? I am leaning towards US Bank as My local cu is worthless for business purposes.

I will maintain my job but at same time have enough freedom to start my own business and get it going.

My 1 big downside is my cc debt which lowered my middle 2,4,5 mtg score from 701 to 653.

Ps, no late payments except for Nov/Dec 2019, that's the only derogatory.

As far as I know, VA is the only loan option that will allow a cash-out refi up to 100% of your home's value.

Based on your current mortgage car rates, I would focus on using the snow ball method to pay off your higher rate debts instead of doing a refi. Here's why.

I used a loan amount of $350,000 for this example:

The interest paid over the life of your current 30 year loan at 3.75% at 350K would be $233,526.

Now let's add the 62K to pay off your other debt and 8K for closing costs. That increases your loan from 350K to 420K.

420K at 7% over 20 years = $361,501 in interest.

If possible, I would start using the rental income you receive to start aggressively paying down the debt with lowest balance and highest rate. Once that debt is paid off, take that payment and apply it to the debt with the highest rate and continue until you've paid off all of the debts you want.

Tiersha · ‎04-03-2023

I hadn't thought of the 100% LTV-that bites-no va option here.

The reason behind this restructuring is so that I have more initial operating costs for the business. Nothing is free to start up.