MELINDA POTCHER

I have a client, let's call her Heidi. Heidi is a very successful business owner who needed to refinance her home in order to pull out equity to use in her business expansion plan. Her accountant counseled her that utilitizing her home's equity would cost less in interest, and would be less of a hassle to obtain than an SBA loan.

Let me show you how this scenario played out, and why if you want to work with a mortgage professional, my advice would be that you CHOOSE ME.

Heidi's current loan is a 30 year fixed at 6.75%. She owes $188k on a $300k appraised value home. Heidi wants to pull out $35,000 of equity. Because rates are so good right now, we can get her 5.125% on a 30 year fixed. The lower rate and cash out result in a payment that is only $33 more than what she is currently paying in a monthly payment.

Pretty cool, right? But wait, it gets better.

If Heidi could handle the payment shock, I advised her to refinance to a 15 year loan at 4.75% instead. why? Not only does she pay off the loan in half the time and get an interest rate below 5% (HELLO), but she will save over $128,000 in interest payments over the life of the loan. Yes, you heard me correctly. The cost of interest on the 30 year loan at 5.125% over time will be $220,835.19. The cost of the interest on the 15 year loan at 4.75% over time will be $92,022.74

Now you may be a skeptic like me and say, well, what's it going to cost me as far as a monthly payment? Glad you asked, that is a great question. Heidi will pay $1,252.32 a month in Principal & Interest (P&I) for the 30 year loan at 5.125%. On the 15 year loan at 4.75% Heidi will pay a monthly P&I of $1,789.01. The difference in the monthly payment is $536.69, which is a stretch for some people, but if you can handle the payment shock, I advise you to look back one paragraph and see the big picture. Over the life of the loan, you will save more than $128,000 of your hard earned money if you go with the 15 year loan vs. the 30 year loan.

Seems like a no brainer to me. If you'd like the real deal with a no-nonsense, give you all your options professional mortgage broker, give me a call today. I will make sure you know all your options upfront so that you can make an educated decision before you refinance your mortgage.

Melinda Potcher, Mortgage Broker, Trinity Mortgage, LLC www.HomeLoansAlbuquerque.com

It was this past Wedesday morning, 9:26am. I officially lost my mind. In that moment in time, I saw my 30 year fixed rates dip down to 5% at par. The 15 year was somewhere near 4.5%. I frantically sent a blast email to all my Clients & Realtors. LOCK NOW! I typed at lightening fast speed, my french manicured nails click click clicking away on my computer keyboard. I ran scenarios, amortization schedules, loan comparisons like a whirling dervish. I advised all I spoke to that I had no idea how long the rates would hold, that given the feds reduced short term rates after a 300+ point loss in the DOW the day before, it was more than likely that the market would rebound, and rates would rise again.

I hadn't seen mortgage rates this good since the Refi Boom of 2003 - when everyone & his brother, sister, cousin, uncle & friend jumped on the bandwagon and locked in some of the most amazing mortgage rates that I have ever seen since starting my career in 1994.

Some listened, some didn't. Some jumped on the opportunity, and some missed out. Because by 3pm that afternoon, here in the desert southwest, the market did indeed rebound and we saw rates climb .60 bps (basis points) back up to somewhere around 5.75% on the 30 year fixed. I was exacerbated, exhausted, and frustrated. Anyone calling me after that was kindly let down. Please understand, that is the last thing I wanted to do was to tell a valued client; "Sorry, you missed the boat today".

Maybe, just maybe, they'll listen and act when I make an announcement like this next time... if there is another next time.

Melinda Potcher, Mortgage Broker, Trinity Mortgage, LLC

www.HomeLoansAlbuquerque.com