What is the Estimated Monthly Savings (Debt Consolidation)

The Estimated Monthly Savings (debt consolidation) is a calculation we do for you so you can easily see if there is a net monthly savings if the contact were to do a cash-out debt consolidation.

The estimated savings amount takes into account the contact's aggregate revolving debts, their current mortgage, and the estimated new payment on a new mortgage at today's average mortgage rate.  

So the calculation will include any revolving type of debt:  credit cards, retail cards, bank cards, and HELOCs.  We start with the total of all their current revolving monthly payments, plus their current mortgage payment, and compare it to a proposed new payment and mortgage balance that includes consolidating their current mortgage balance, and all their reported revolving and HELOC balances.  We estimate a new payment with that new balance and the average market rate at the time of the alert.   You will find this just below the alert intel on the alerts that the savings is over $100.  It will look something like this...

monthly savings estimate

Also, keep in mind, as mortgage rates decrease, we will automatically recalculate this for all your contacts and show you new opportunities to help your clients via predictive alerts.  

If you do not have predictive alerts enabled, click here to find out how to enable predictive alerts

This gives you the ability to quickly identify which predictive alerts have significant savings, even if they have a lower-than-market rate on their current mortgage.  Revolving debts are based on adjustable rates and increase when other rates increase.  Most clients will experience payment shock when their credit card and HELOC monthly required payments increase.  For some that creates cash-flow problems and a debt consolidation can free up hundreds or even thousands of dollars per month.  We have determined this calculation is a highly correlating factor to someone starting a cash-out refinance.  

Since this figure is an estimate and cannot be calculated perfectly until you take an app and run the exact numbers, the estimated figure should not be quoted to the customer.  The calculation is for your knowledge so you know who to follow up with to discuss debt consolidation.  Before now, you would have to guess who might have significant savings and reach out to many clients.  Now you will know who to best focus your cash-out prospecting efforts on.

Note:  There are many other reasons clients may decide to do a cash-out mortgage, for example, to fund home improvements or self-employed business projects.  So keep that in mind for the other cash-out-related predictive alerts.