Success Stories • David and Julie lived in the outskirts of Charlotte in a one bedroom apartment. Jonathan had just turned four and the apartment lifestyle was just too cramped. Their dream of moving to Cabarrus County, buying a 3 bedroom - 2 bathroom home, in a neighborhood within a mile of a great elementary school seemed almost impossible. The bankruptcy that was filed just 8 months ago because of David’s lay off was surely to get in their way of qualifying for a mortgage - not to mention the 543 credit score that he currently held was not helping him much. David called me because I provided a mortgage for his co-worker Steve Thomas several months prior. As David and Julie shared with me the story of their past and their dreams of owning a home, it was very clear to me that this was not impossible but it would take a very strategic plan if they wanted to see their dream come true. After carefully reviewing their current situation, I customized a solution for them. I laid out a customized credit repair program for them to be working on and gave them specific deadlines for when these things needed to be accomplished. They stuck to the game plan and 16 months later I had the privilege of attending their closing for their 3 bedroom – 2 bath home, in that quiet neighborhood that they once dreamed about but didn’t think would happen. • The newlyweds, Sally and Drew were moving up!! They were selling their 1,600 square foot ranch and buying a 2,400 square foot 2 story. They were extremely excited and couldn’t wait to move in. They had saved enough money to put down 20% - a sizable down payment. When they came to see me to discuss financing options, they proposed their plan of paying extra payments to principal each month and paying off the mortgage early – in 22 years versus 30 years. Not a bad idea…huh? Or was it? With their plan, they would only be 47 years old and not have a mortgage payment. Who wouldn’t want that? Are you kidding me? I had a detailed discussion with them and showed them that they would be making a terrible mistake by proceeding with their plan. You see, their current interest rate was fixed at 5.75% on their soon to be mortgage. I suggested that they finance the home with no money down, invest the 20% down payment into a tax deferred account, and then make monthly payments to the account with the money they were going to use to make extra principal payments. What????? With this plan (assuming only a 8% rate of return on their investment) they would have enough money to pay off the home if they wanted to at the 17th year and also have an extra $21,000 left over. With this strategy, after 30 years they would have enough money in that account to pay off the loan and have $534,000 left over. Not bad advice was it??? • Betty was turning 65 in a few months and was having trouble making ends meet. Her Social Security income was fixed and it was becoming harder and harder to pay for groceries, medications, utilities, and all the rest that comes with owning a home. Thankfully, her $200,000 home was paid for and she didn’t have the burden of making that payment anymore. Her daughter Tracy was refinancing her home with me when she started telling me her mother’s story. This same story is very common in the elderly community. Many elderly individuals have their homes paid for and all of their equity is “tied” up in the home and can not be tapped into if needed in times of emergency. I told Tracy that her mother needed to do a “Reverse Mortgage”. This particular loan would mean that the bank would give her mother either a lump sum payment of $100,000 or monthly payments of $712 WITH NO REPAYMENT!! Yes, it is true! With a “Reverse Mortgage”, the bank tapped into Betty’s equity and now she can live comfortably again. She even used some of the money to take a cruise. • In the fall of 2004, Jeff and Stacey called me to see if I could help them finance the “home of their dreams.” I helped Jeff’s father refinance his home the previous year and he thought I could give some sound advice to his son and daughter in-law. Jeff and Stacey lived in an apartment and desperately wanted to move to Cabarrus County and move their children into a great school district. The home they found was just around the corner. After several minutes of asking some very profound questions, I determined that the bankruptcy that was filed in 2002 may still cause an issue and the late car payment 9 months ago didn’t help their situation. As I asked more questions, more was revealed to me that helped their case. The bankruptcy was caused due to a lay off by Jeff’s employer and the 401(k) balance of $32,000 showed their ability and willingness to save. Their credit scores were lower than most loan programs allowed, which was a road block for sure. After reviewing all of the information given to me, I diagnosed the situation and prescribed a solution. The credit report contained inaccurate information. Some of the accounts that were in the bankruptcy did not report correctly. These specific accounts were still showing an unpaid balance which was keeping the scores down. I had a credit supplement performed to get these corrected and as a result, there was a 41 point increase in the score (They needed 38 points) which now meant Jeff and Stacey were a little closer to their dream home. In a situation like this, it is important to explain the incident to an underwriter so he or she feels comfortable that the problem was an isolated occurrence. I recommended that Jeff and Stacey write a detailed explanation for why the bankruptcy was filed and to stress how their life is so much better financially than it was in 2002. I also had them explain that the recent late car payment was merely a miscommunication between them (Jeff and Stacey) where Jeff thought Stacey had paid it when at the same time she thought he paid it…an honest mistake. The underwriter approved the loan stating that the loan made sense and she understood their explanations. Now Jeff and Stacey live in their “dream home” on a tree lined street and they now look forward to dropping their kids off at school on their way to work.