You are with RBC, your mortgage customers mike and brie are coming to you for help in
Question:
- You are with RBC, your mortgage customers mike and brie are coming to you for help in dealing with their debt. They are indicating they are having challenges in making payments and ending up with any savings. They are somewhat embarrassed to show you all the debt and wonder if they should just declare bankruptcy.
Here is what you have from them ahead of time.
The home is valued at $400,000 with a heat of $200/m and property tax of $5,000/year
Combined income are $95,000
They would like to see if you can use the equity in their home to refinance this.
They would like to keep as much limit as possible on the line of credit in order to have the flexibility to draw on later. They do not want to stay in this situation
Do not grant them any new credit or limit increases on other than a new mortgage
Client is concerned with rates increasing and wished to go with a 3 year term to hopefully get past the rate increases by renewal time
Legal fees are $1,500
Calculate mortgage penalties (client received no discount on previous mortgage)
Calculate the final financial impact to customer based on past and new monthly payments
No cash to customer
What would you consider for this couple?
Do not suggest bankruptcy as one of your options
Expert Answer:
Given Mike and Bries situation its important to explore options that can help them manage their debt without resorting to bankruptcy Heres a potential ... View the full answer
