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Case Study

Refinancing a Property

In 2005, Susan and George K. obtained a construction loan to build their dream home. They purchased a lot, worked closely with an architect, and began construction. But in the midst of building the housing bubble burst. The couple was left with a house that was underwater and a loan they could not refinance.

Already paying an excessive interest rate of 6%, they were then charged penalties for exceeding the term of the construction loan balloon. In all, they found themselves faced with a monthly obligation of nearly $15,000. For four years they attempted—and failed—to refinance or restructure the loan because their bank demanded a cash-in refinance. To do so would have meant liquidating a considerable portion of their IRA and paying tax penalties because they were not yet 62. Their cherished dream of retirement was in jeopardy.

The couple’s financial professionals had no way to help them. So they referred them to Lendacy. In a matter of days, they were able to obtain an investor relationship line of credit below prime that enabled them to execute the cash-in refinance without liquidating their assets. Their monthly costs were reduced by 300% to $3,000 a month.

They are now in their dream home, able to repay their debt and live comfortably off the dividends and interest from their untouched assets.