ELIMINATE DEBT BY MOVING UP WITH ONLY 5% DOWN
Most home owners think that only first time buyers qualify for the minimum 5% down
rule and that 20% down is required.
Not true. The 20% equity rule applies to refinance only. Yes it used to be the 5% down
was only for first timers and to qualify you could not own for at least 5 years. Those
guidelines where quietly eliminated back in 2002 when lending became easier. The
important news is that they are still in effect.
We see many people who want to move up and eliminate consumer debt but believe
they need 20% down. For this reason they think there is not enough equity to do both.
Wrong. We have successfully helped many clients sell their homes, pay off all existing
debt, putting 5% down on the next purchase all at the same time lowering their total
payments slightly.
END RESULT: BETTER/BIGGER HOME WITH DEBT GONE! Take Vicky & Tom who
had $80K in credit card debt and loans costing them $1,686 per month.
They sold for $357,000 less mortgage of $223,000 leaving a net $134,000 less 5% real
estate commission $17,850 less consumer debt $80,000 leaving them with $36,150
cash.
They bought a beautiful much larger home for $454,000 with 5% down of $22,700
leaving them sufficient funds for legal and closing costs. Note - with a 20% down
payment, this never would have worked. They also purchased bridge financing so they
could take 3 weeks to decorate and make some changes to their new home before
moving in. A low/no stress move indeed!
The magic lay in the final tally and swapping bad (high cost) debt for good (very low
cost) debt. Because todays rates are below financing costs 5 years ago, Vicky & Tom
ended up saving $416.00 a month from their previous situation.
Obviously to make it work, they needed to have sufficient equity and income to qualify
for the bigger mortgage, but what a solution. One that improved their quality of life
greatly, starting afresh with no consumer debt.
Many feel stuck with high consumer debt and payments and no where to go or get out.
We may have an answer for you.
Please call us for a free, no obligation review of your situation. We will provide you with
our analysis of your ability to trade up, possibly eliminate your debt, and put a big smile
on your face.
We love finding solutions like this, that you will not get from a bank.