Win more loans, earn more, and preserve your client's equity avoiding the cash out trap.

"I can earn more money and win more loans by selling a smaller loan and not maximizing the cash out?"

"And I can help protect and improve my clients fico and dti while helping them to eliminate all of their debt?"

Yes, and there are additional benefits for both the mortgage planner and your client.

We're going to look at a way for you to win more loans and make more money while putting your client into a smaller loan than the competition and preserving more of their precious equity. And you'll gain more future business too.

Let's look at the typical cash out refi as has been done the vast majority of the time and how you can provide superior service and go beyond for your client. Ensure more future business and earnings for you while providing a better solution for your client.

The typical loan officer will use as much of the client's equity as they can to pay off as much of the client's debt as possible, and will do this every time the client comes back in after having built up their debt again and again. They want to maximize the loan amount to make a higher commission. Each time this happens the client's equity decreases and eventually there isn't enough equity left to help them again and they are in deep trouble and possibly on the verge of losing their home. And you won't see any more transactions from them. You probably aren't the one who did the 2nd or 3rd cash out anyway as most people were too embarrassed to go back to the same mortgage company. What got the client into trouble? They got used to the new mortgage payment and spending the extra cash freed up in the refinance and then went on to use their newly freed up credit cards.

There is another way to use a cash out that benefits everyone, is better for the client, ensures additional future transactions for you, and earns you more money. In the old typical cash out refinance, you "pay off" some higher cost debt (usually compounded interest credit card debt) and transfer the debt to the lower cost (simple interest) mortgage debt. You used home equity to transfer that debt, you did not pay off the debt.

This is where you can use our fully administered debt elimination program to win the loan, earn more, and save your client more money while getting them completely out of debt with a plan that is followed for them. It's a fantastic mortgage planning tool that will set you and your services apart from the competition. You can put your client on track to save from tens to hundreds of thousands of dollars. What we suggest is that you use as little equity as possible to pay down enough debt to obtain an improvement in cash flow if it is needed which can be used as the margin (overage payment) in our program. We'll address the remaining debts in our program which will allow the client to eventually use the cash flow freed up by eliminating the debts to dramatically improve their retirement contributions or contribute to other investments. You also earn a commission for our program that pays you more than the additional $30,000 to $50,000 you were going to use to transfer the debt over to the mortgage.

When you "pay off" all of the debt in the refi the old way, the client gets used to the new lower monthly payment and spends the money instead of using it to improve their retirement or investing it. You'll hear the loan officer say they advise their clients to use cash freed up by a maximized cash out refi to pay down their mortgage, which almost no one does for any length of time if they do it at all. Plus you have just sucked a portion of their equity out of their home that could take years to rebuild. And you may have left them with an LTV that doesn't allow them the ability to do another refi if they need one or could benefit from an improved rate change in the near future with a rate & term.

Using our method, you retain as much of their equity as you can which allows you to help them when they need another mortgage transaction and gives them options they won't have the old way. It also allows them to get used to a payment that will not only eliminate all of their debt, but go on to build their retirement or other investments. You may also be able to give them a little payment relief on top of all this while still retaining most of their equity. And our program works with our clients current investment strategies including leveraging their mortgage through equity management.

Within the monthly payout in our program we'll free up more cash as we pay off each debt building up the monthly cash flow and using it to truly pay off the debts. That cash flow we free up can then be used by the client to beef up their retirement after or even while we are paying off the debts. It's very important to factor in that less than 10% of your clients are building a retirement fund that will let them retire comfortably and provide for them. Many of them will be dependent on family members or have to continue to work when they should be enjoying their retirement years.

Now also realize that in our program we will be helping the client to protect their credit through an advanced bill pay system that follows the personalized comprehensive debt analysis program our system created for them. We'll also be improving their debt to income (dti) ratio and credit which helps them to more easily qualify for future mortgage transactions when they need them. And who are they going to go to in the future for additional "makes sense" mortgage transactions but the one who put them on track to eliminate their debt and build their retirement.

So by doing the cash out refi the smart way we can ensure that the client retains as much equity as possible, actually pays off their debts, is able to build their retirement, has more options in the future, and protects and builds their credit.

Learn to explain this to your prospects and then ask them which type of company they want to work with. Explain the difference between the company that wants to "kind of pay off" all of their debt with their home equity and what you can do to truly pay off their debt while protecting and preserving their home equity. It makes for a pretty clear choice.