This section features generic examples of real life scenarios describing how home wealth can be used to provide short term solutions, or in implementing a longer term financial strategy. To read abbreviated stories from some of our clients, please visit the Testimonials page.

Motivation:

Retire Debt Free

Situation:

Husband and wife in their mid 50s have lived in their home for 10 years, and have $300,000 mortgage principal remaining. They both plan to retire in the next 2 years and want to eliminate the burden of their mortgage debt now to enable them to retire debt free.

Outcome:

Funds Received:

$ 500,000.

Appraised Home Value:

$ 3 Million

Used $300,000 to pay off their mortgage, which, in effect improved their monthly cash flow by $1,100 (their mortgage payment including interest). In addition, their financial planner used the residual $200,000 to create a retirement plan for them that enabled the principal to grow tax deferred and included principal protection.

Motivation:

Launch a New Business

Situation:

Both husband and wife in their 40s have had successful careers in the technology industry. Together they created a new software application and secured a term sheet for $250,000 in seed funding from angel investors in exchange for 51% ownership. The couple did not want to surrender their potential upside gain, nor share control over the company’s management. They sought a no-loan alternative to funding the business independently.

Outcome:

Funds Received:

$250,000

Appraised Home Value:

$ 1.7 Million

Cash received was sufficient to launch their business and enabled the clients to keep 100% of their equity without having the burden of monthly payments or repaying a loan.

Motivation:

Reverse Mortgage Alternative

Situation:

Recent widow in her early 70s living on fixed income. Wants to stay in her home and preserve equity to pass on to her children. Deceased husband’s medical bills left her with a cash flow shortage of approximately $700/month, which she needed to pay her $200,000 mortgage. She considered taking out a reverse mortgage, but didn’t want to incur additional debt and risk eroding the equity she had built. Also, she wanted to retain the option to move out of the house in the near future and rent it out.

Outcome:

Funds Received:

$170,000

Appraised Home Value:

$990,000

Met with an insurance specialist able to provide her with a plan that generates monthly income, which will help cover her mortgage payments, and will pay out for the rest of her life.

Motivation:

HELOC Payment Increase of $1,000/month

Situation:

Ten years ago a couple in their mid 50s couple took out a $250,000 Home Equity Line of Credit (HELOC) to make some renovations and cover other expenses. They recently received notice that their HELOC will automatically reset with a $1,000 per month payment increase.

Outcome:

Funds Received:

$250,000

Appraised Home Value:

$1.6 Million

By paying off their HELOC, these clients eliminated the burden of $250,000 in old debt and avoided having to pay more than $100,000 of interest payments for the next 15 years. This resulted in a cash flow improvement of approximately $1900 per month.

Motivation:

Home Improvement

Situation:

Semi—retired homeowners carrying a $223,000 mortgage on their home and other debts did not qualify for a home loan. They sought an alternative way to pay for an addition to their house for their adult son, daughter-in-law and grandchild to move into.

Outcome:

Funds Received:

$320,000

Appraised Home Value:

$2.1 million

Within 5 weeks after qualifying, the clients received their funds and construction has begun.

For more information about how Barastone can help you, or to get more information about our services, please call us at 650-802-0800.

Contact Us

info@barastone.com

1900 O'Farrell Street Suite 145
San Mateo CA 94403

(650)802-0800

Barastone, LLC, Real Estate Investments, San Mateo, CA