Debt Consolidation

Meet Ted and Lacey, a hardworking couple in their early 40s striving for financial independence. They bought their first home six years ago with a 3.5% mortgage rate and recently welcomed their second child. While both have promising careers- rising daycare costs, student loan payments, car loans, and credit card debt have created financial strain. A strain made worse by a past investment loss and the purchase of a new family vehicle.

Despite these challenges, they wanted to create a playroom for their boys by taking out a Home Equity Line of Credit (HELOC). Seeking guidance, they turned to their trusted “Mortgage Guy,” Jim Yarrington.

Jim listened carefully as they shared their concerns and financial goals. While they could access $55,000 through a HELOC, he explained that the real issue wasn’t interest rates—it was cash flow. Their current mortgage was at 3.5%, but their overall household interest rate across debts was over 8.5%. Instead of adding another loan, Jim proposed a smarter solution: consolidating their debts and pulling out the $55,000 with a single, fixed-rate cash-out refinance.

Though the new loan carried a 6.625% rate, it saved them nearly $1,900 per month. Even better, by applying half of that savings back toward their mortgage, they could pay it off in just 14 years instead of 24.

With this simple financial shift, Ted and Lacey found relief. With their increased cash flow, they were able to achieve their goal and give their boys a fantastic lower-level playroom. The couple feels confident they’ll regain their financial footing within five years. Plus, as they rebuild equity, they’ll have more options if they decide to upgrade their home in the future.