Discover Why Tough Times Call For Creative Financing Solutions

I have been working with a few families who are struggling with their cash flows due to this crazy economy slowing down. While their problems are not “real estate related,” the fact is that they need to cut their expenses at home. In doing research in trying to help them re-balance their real estate portfolios, I have stumbled across a product that could be a “life-saver” for anybody who is fortunate enough to have an IRA and/or stock portfolio.

Traditional Real Estate Solutions Offer Little Help

Let’s take a look at a fictitious family, Lane and Debbie Jones. Recently, Lane’s business has not been doing very well and his six figure income has been reduced in half. The $400,000 mortgage on their home was not a financial burden at all for the past five years, but all of the sudden the monthly payments are taking a great toll on their monthly cash flow. What are some of the options the Jones’s have?

Sell the home and rent or buy a less expensive one - Lane and Debbie really love their home and do not want to sell. Additionally, they feel like selling now in a bear market is foolish, as their home is worth about 60% of what it was worth just three years ago. Because of its location, they feel the home will regain its value fairly quickly when the market stabilizes. Due to these reasons, Lane and Debbie will only sell the home if it is their only option.
Refinance the home with a loan program that would reduce the payments - Debbie has a close personal friend who is a mortgage banker and has offered some ideas on refinancing. A new 30 year fixed loan reduces the payment a nice amount, and an interest-only product reduces the payment to significantly as well. Unfortunately, due to the loss of value of the home in today’s market, they would have to pay-down the mortgage balance for the refinance. Ultimately, they feel that refinancing the home is only “white-washing” the problem, as it slightly fixes the cash-flow problem but it also delays the “pay-off date” of the mortgage balance. They want to own their home “free and clear” as part of their future retirement plan.
Lease the home to somebody else and downsize while Lane’s business recovers - While this sounds like a plausible plan, the fact is expensive homes typically do not draw the income required to carry the mortgage and the other expenses of owning real estate. Additionally, Lane and Debbie would have strangers living in their home while they have to go out and pay for inferior accommodations. After running the numbers, this solution would not really help at all.

Stock Loans Are A Creative Real Estate Solution

Fortunately for Lane and Debbie, they have been disciplined over the years and have maximized their contributions to their IRAs. They have also managed to put some money into a stock portfolio that they plan on using for their retirement. Thanks to a new type of loan product that is available to people who own stock in publicly traded companies, the Jones family has a new solution to consider for their cash-flow problem.

Mortgage Rescue HedgeLoan - This new product was designed for people just like the Jones family. It is actually possible to borrow money using an IRA as collateral, that requires interest only or even no payments. They do not want to liquidate their stock positions because they really think the current depressed market has driven the values to much lower than the stocks are worth. Lane and Debbie know they just need to weather the storm and their portfolio will be worth much more again in the future.

Utilizing a Hedgeloan (a loan that uses a stock portfolio alone as collateral), Lane and Debbie are able to borrow the entire $400K to pay off their mortgage. The new Hedgeloan requires no monthly payment! Lane and Debbie are now having their money work for them, as opposed to them having to work for their money!

Why A Hedgeloan Works In Good Times and Bad Times

The greatest part about using a Hedgeloan is that it works for you in every future market scenario. Whether the market goes up, the market goes down, or the market stays flat, the borrower is covered:

What if the stock market plummets? - With the turbulence that we have seen in the stock market lately, you want to use a non-recourse loan product (one that does not put your other non-secured assets at risk) that allows you to get the money you seek, without risking everything that you have. When the loan comes due, if your stocks are worth less than the loan, you can simply give the lender your stocks and the loan is satisfied! No deficiency. They took the risk and used the stocks as collateral.
What if the stock market sky rockets? - This is a great scenario that gives the HedgeLoan borrower many options. The borrower could renew the loan, the borrower could sell some stocks and pay-off the loan, or the borrower could sell all the stocks and repay the loan plus pocket any additional cash.
What if the stock market moves in parallel with the loan interest rate? - Again, this scenario gives the HedgeLoan borrower great options. The loan could be renewed or repaid by liquidating the portfolio.

How To Find Out If A HedgeLoan Is Your Real Estate Solution

Just click “Get a Free Online Loan Quote” and fill out a short information form. A HedgeLender represenative will give you a call to verify, then generate anywhere from one to ten term sheets, each with different stock loan emphases, such as lowest interest rate, highest loan-to-value, etc. They will talk them over with you, and you’ll pick the offer you prefer and sign, fax it to them (there is no obligation up to this point, and no out-of-pocket expense of any kind). They will deliver the loan documents for you to review, and if acceptable, you’ll sign. You’ll move your “title” (the stocks) to the HedgeLender, then they will confirm, hedge, and fund your loan. Your quarterly reports will be delivered thereafter, and your HedgeLender will remain available to you throughout your loan term for any questions, extensions, or other issues. Your total satisfaction is guaranteed.

Reader Feedback

If you have any experience using a HedgeLoan, I would love to see some feedback. While many clients are just starting to look at these new and innovative products, I would love to hear what people think about using them. Please use the comment section below to add to this exciting subject.