Backstory:
Originally, the clients came to us to get pre-approved for a mortgage to buy a new home. After months of searching, reviewing their existing financing and speaking with a solid realtor that really took the clients considerations into heart, decided they could renovate their existing home and achieve all the goals a new home without actually moving.
Mortgage Solution:
We pre-approved clients for a mortgage of $640,000. However, debt load was fairly high and payments were stressful. Moving with children, paying off debt, taking on a new mortgage was overwhelming. When we discussed refinancing in which we would pay off existing mortgage (higher rate), consolidate all interest baring debt with higher rates and provide enough capital to do minor renovations the refinancing process seemed to make a lot more sense then moving.
End result was better cash flow with the reduced mortgage rate, no debt obligations which freed up the cash flow for the higher new mortgage. More capital going towards principal and paying down mortgage faster which was the long term plan. Along with all those benefits, the renovations completed and the clients love their "new home" without moving!