English Teacher Saves $600 a Month with Mortgage Refinance

By Mortgage Outreach Staff

Brenda is an English teacher for the Los Angeles Unified School District.

Issues: Negative equity, high interest rate
Property: 2 bedroom ranch
Purchase price: $350,000
Loan amount: $315,000
Loan to Value: 104%
Credit score: 750
Debt to Income Ratio: 30
Solution: Refinance
Old payment: $2,268
New payment: $1,664

Situation: Brenda finally managed to purchase her first home in West Los Angeles after years of saving and living modestly on her teacher’s income. To help offset the mortgage, she rented one of her bedrooms to a student at nearby UCLA. She always paid her bills on time and never carried a lot of debt, except for splurging with her credit cards at Christmas time, which she always repaid within a couple of months. Unfortunately, she bought at the top of the market with a high interest rate of 7.8 percent. The home values in her neighborhood started to drop below her mortgage.

Brenda heard of MortgageOutreach.org through a friend and started looking into her options. With an excellent credit history, she learned that she qualified for a refinance through Freddie Mac, because her Loan to Value (LTV) ratio was under the new 105 percent ceiling. With savings of more than $600 a month, she was able to stop taking in student boarders and has turned the spare bedroom into a painting studio.

“Thanks to MortgageOutreach.org, for the first time in my life, I truly have my own place. I can shut the door and know that it’s all mine,” Brenda says.