It’s no secret that the last few years have been difficult with managing rising costs and job uncertainty.
In John and Sue’s case, the stress of their upcoming mortgage renewal kept them up at night. They were already living tightly with the increased cost of living and a reduced income with a recent job loss.
They were fearful of what payments would be like with the increased rates when their mortgage would renew.
But, as I like to say, let’s make the numbers work!
It took some planning, but in the end, we reduced their monthly payments and freed up $750 per month in cash flow.
They had built up enough equity in their home to pay off a higher interest rate loan payment.
We increased the amortization of their mortgage from 20 years to 25 years to help lower the payments.
I know a lot of folks have a negative view of increasing the amortization of a mortgage. I don’t think the media helps with this thought. All we’re doing is restructuring the loan to better fit financial capacity.
With John and Sue, we developed a plan of action on what they can do over the next few years to reduce the amortization on their mortgage, such as making pre-payments.
Creating a Cash Flow Plan
There is a lot of fear regarding affordability with higher interest rates. However, the best way to conquer this fear is to plan.
It takes planning, restructuring, and at times, a lot of work. Lenders ask for a lot from borrowers to make this all happen!
However, all that work is to do what’s best for you. In John and Sue’s case, this was increasing their cash flow. They didn’t want to feel like they couldn’t afford their home anymore.
The financial stress on what to do can be debilitating for borrowers. Having an expert like myself look at the overall picture and create a plan, is the best thing you can do to feel confident in your financial future.