Many borrowers have a home that has little equity or is upside-down. They’d love to refinance but with no equity, the only way to get the loan done is to pay down the mortgage.
What if you could offer the borrower a program where they could use their assets as collateral for the loan instead of spending all their savings and liquidating their assets to pay the mortgage down?
After all, the property is probably not going to appreciate for quite some time, and in fact will probably continue to depreciate in the near future. Moreover, if they liquidate their assets to pay down the mortgage, then they would be subject to a hefty capital gains tax, and, they would be pulling their assets out of an income bearing vehicle.
We allow the borrower to “pledge” their assets to make up for needed LTV. This way the borrower can refinance into more reasonable terms and still keep their assets where they can continue to work for them.
Ask Derek about how the Pledged Assets program might be a great solution for your client.
