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Original loan amount & rate: $500K, 2.85% Other high interest debt amount & rate: $60k, 25% Total Monthly payment: $3,500
TRADITIONAL PREPAYMENT
Sell home & Pay Off amount:
Not a viable alternative based on higher market rates.
$480K, 7.0% ($420K pay off mortgage plus $60K cash-out to pay off other debt)
RDP
PREPAYMENT
New Cash-out ReFi loan amount & rate to pay off original loan & high interest debt:
$3,200
New monthly payment:
Cash out ReFi
$300 per month
THE
BENEFITS
Lower monthly payment
$20K, and other debt fully paid off
Reduced mortgage debt:
Business Case Example
CURRENT
TAKARA PROGRAM
Total assets: $30 billion
Portfolio FRM (#,$): 7,500, $5 billion
Avg. rate: 3.5%
Total unlocked value: $600 million
Borrower benefit per loan: $85,000
Bank fee per loan: $7,500
Bank Benefits
- New fees
- Origination flow
- Capital relief
- Improved liquidity
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