Jordan & Alex (names disguised) were put in touch with Sigman Financial Fitness® via the Financial Planning Association’s web site. They had a number of financial planning issues they wanted to discuss regarding insurance, estate planning and investments.
But they had to leave the first planning session early because they were showing their historic (i.e. old) house. Lauren asked why the house was up for sale, and they explained that they couldn’t figure out how to obtain a loan to do the extensive renovations the home required. They had recently received some very poor advice from a mortgage broker who had suggested obtaining an entirely new first mortgage at a higher rate to finance the renovations.
Sigman Financial Fitness® Advice:
Lauren suggested a much simpler approach: She would meet with a couple of local banks with whom she has lending relationships, and would help them obtain a Home Equity Line of Credit based on the appraised value of the home based on their plans and drawings. She suggested a couple of appraisers whom she thought would do a careful evaluation of their home’s finished value. Approval for the line of credit was granted within days, and before Lauren knew it, the roof was off their house!!
The financing structure she created enabled them to keep the great rate they had obtained on their first mortgage, and gave this young family more flexibility paying down the home improvements over time.