MortgageInterest

R E P U R P O S E

F O R M I N I S T R Y A N D M I S S I O N S

J O E l M I k E l l & k E v I N l l O Y D

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We know that mortgage interest and loan refinancing probably aren’t the topics that keep

you up at night. But what if we told you that you could raise $50,000, $100,000, or more for

your church in the next 12 months without taking up another special offering? Even better —

how would you use those dollars to increase your outreach and create even more life change

through your ministry?

You probably think about what ministry you wish you could do as much as what you know you

need to do. It’s likely frustrating at times to think about what is just out of reach due to budget

constraints or other financial limitations. The good news is that for some churches who are

still paying off mortgage debt, you might be able to harvest some dollars currently allocated

for mortgage interest and repurpose those dollars for ministry.

What’s even better is that it won’t cost anything up front, comes with no strings attached, and

no one in your church has to know until the discovery process is complete.

No, church mortgage refinancing isn’t for everyone. But the potential savings could mean

more money that becomes available immediately for more ministry. That is, at least, worth a

conversation.

Introduction

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We’ve assembled some questions we receive regularly around the topic

of mortgage refinancing as a way to help you discern whether or not this is an

opportunity you are interested in exploring.

Why should I care about refInancIngour current church mortgage?

Mortgage interest rates are at historic lows. If your church has not refinanced its mortgage

to these lower available rates, you might be missing out on a significant savings opportunity.

These cost savings should flow to greater ministry opportunity within your church rather than

continuing to flow to your banker. Low interest rates will likely not continue into the distant

future.

everyone says that Interest rates are at an hIstorIc loW.hoW can I knoW that Is true?

The last time mortgage interest rates were this low was in 1951, when the price of gasoline

was 16 cents a gallon. With inflation concerns being discussed widely throughout the

business sector, now is the time to renegotiate your loan rate. Over the past few months,

we’ve seen mortgage interest rates trend upward. That comes as no surprise, because they

reached low points that no one expected. Even though the rates are increasing, you can still

save a significant amount of money by refinancing.

Frequently AskedQuestions

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If church loan refInancIng Is so accessIble,Why Isn’t every church doIng It?

Most church leaders don’t think about refinancing their debt as a way to improve their

financial pictures. Encouraging people to give more is the most commonly used strategy.

Many other churches have long-standing relationships with their local banks. Through the

years, the bankers have been good to them and earned their business. The idea of changing

banks to save money is hard to swallow.

hoW do I knoW If I qualIfy to refInanceour current church mortgage?

You won’t know until you begin the process. Most churches are financially healthy and,

therefore, good credit risks for banks. By being a good credit risk, many churches qualify for

lower mortgage rates because banks want to lend to credit-worthy businesses. Bankers want

to look closely at your church’s giving and attendance trends. They want to trust that your

congregation will be able to handle the payments on the loan they extend to you.

What are the steps Involved?

The first step is to contact us at RSI and our team will walk you through the process. We

will collect most of the information banks need and then, depending upon the bank, we will

request additional information as needed. In reality, you already have most of the information

at your fingertips; we just need to help you gather the right information. We will review

property and facility plans with church leaders, take a look at your financial statements, and

review attendance records. Depending on the nature and scope of your project or need, we

will gather additional information to include in the application package.

hoW much tIme Would I have to commIt to the process?

It won’t take long for us to gather the information we need to prepare your application

package. The time commitment on your part will be determined by the organization and

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availability of the information needed for the application. Once the application is complete, we

will keep you apprised of the status. From start to finish, the refinancing process takes three

to six months. Most of that time, however, is spent waiting for the banks to do their part.

What Is the typIcal InformatIon a bank needs to determIneIf We qualIfy for refInancIng?

Much like a personal mortgage, banks want to know income and expenses, existing debt,

and bank account balances. The banks will analyze your credit-worthiness and determine an

interest rate based on your history of paying your bills and managing your resources. They will

want to see attendance trends and other data pertaining to the overall health of the church.

Is there any upfront cost to the church?

No. We charge a fee only if we are successful at renegotiating the mortgage loan. Our fee

is based on a percent of savings. So, there is really no out-of-pocket cost to exploring

refinancing.

am I commIttIng to a loan If you uncovera refInancIng opportunIty?

No. You get to make the final decision on whether you want to proceed with refinancing or

not. We will show you all of the information you need to make an informed decision. We will

detail the savings and any costs associated with the refinancing options. We want you to

make the decision that works best for your church.

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What WIll you do on my behalf? In other Words, What Is my responsIbIlIty throughout the process?

We will prepare all documentation needed for the application process. Initially, we will collect

about 90 percent of what banks usually request. All we ask is that you make the information

we need available to us. We take care of it from there. We will act on your behalf so you can

focus on doing what you do best—ministry.

gIve me an example of the potentIal savIngs In general.

Let’s suppose your church has a $3 million loan with a 6 percent interest rate. If we

renegotiate the loan rate to 4.5 percent, then the church would save $45,000 each year! Over

five years, you’ll save $225,000. Your savings will vary depending on the actual interest rates

available at the time of refinancing and the specifics of your situation.

can I InItIate the dIscovery process WIthout a church vote? In fact, does anyone else In the church need to knoW untIl

We are sure thIs Is a good move for our church?

That’s up to you and your church policies and practices. We don’t require you to have any

congregational approval before we begin working on your application package. You can wait

until you have an acceptable offer from a bank before you present this to your church.

What are the characterIstIcs of churches that are best posItIoned to be refInanced?

If your church has a mortgage of any size at an interest rate that is at least one percent above

the prime rate right now, you should look into refinancing. The better your credit, the lower

your rate will be. It doesn’t cost anything to look into the possibilities. You’ll never know how

much you can save until you ask.

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What happens If you dIscover that We are not In a fInancIal posItIon to be refInanced? What then?

We will have a good feeling about your credit-worthiness following our initial consultation.

If we discover issues that might interfere with your refinancing process, we’ll let you know

and help you decide whether you want to proceed or withdraw. We don’t have to submit the

package to our network of banks. We will offer you some practical steps you can take to

prepare for refinancing in the future.

If the loan orIgInator or local bank offIcIal Is part of the leadershIp of my church, hoW WIll thIs affect hIm or her?

Most bankers understand the competitive nature of the business. The fact that you are willing

to look around for a lower interest rate might spur your banker to lower the rate on your

current mortgage in order to keep your business. As a church leader, the banker should desire

that the church be good stewards of all the resources entrusted to it. Ultimately, it is our goal

to identify ministry partners who will work with you now and in the future.

We’ve been WorkIng WIth our local bank for years. We’re pleased WIth theIr servIce. Why should I consIder a

refInancIng WIth another bank?

The banking industry has changed a lot over the past few years. Many local banks have been

bought out by larger national banks. With interest rates low, banks need additional business.

Therefore, they are willing to earn your business by making competitive offers. The saying is

true, “You win when banks compete.”

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hoW many banks WIll you approach to ensure We get the loWest possIble Interest rate? hoW many offers

WIll We have to consIder?

We will send your application to the banks we believe have the best opportunity to lower your

interest rate and save you money. Our network of banking partners understands the work we

do and the clients we represent. At the end, we will present you with two or three options that

best fit your needs.

Is It possIble that We can loWer our Interest rateWIthout havIng to leave our current bank?

It is possible that your existing bank will compete for your business and work with you once

they know you are serious about taking your business to the bank that offers the best rate.

Though you might end up using the same bank, you’ll still have to go through the process of

applying for refinancing.

hoW do I knoW you Won’t sell our prIvate churchfInancIal detaIls to a thIrd party?

We never sell information to third parties. We are dedicated to keeping your church financial

records as safe as you keep them.

Why Is rsI Interested In helpIng our church refInance our mortgage? aren’t you a capItal campaIgn company?

RSI’s goal is to help local churches build the Kingdom, but that isn’t limited to a building

project. Helping a church repurpose mortgage interest for ministry and missions is a win for

everyone involved.

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WIll beIng refInanced noW affect my abIlIty to borroW agaIn for future mInIstry expansIon projects?

No. By improving your cash flow and freeing up operating revenue, you’ll be in a better

position to finance future ministry.

If you are able to reduce our church’s overall mortgage Interest today, WIll you be able to help me get

a neW loan In the future?

Yes. The process used to refinance your current loan is very similar to the application process

for an existing loan. When you are ready, just let us know.

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It is our responsibility to be good stewards of everything God entrusts to us. When we are

good stewards, we not only maximize every dollar for ministry but also position the church for

future ministry expansion opportunities. Smart money decisions today will pay huge dividends

in the future.

By refinancing high interest mortgages, you’ll be able to improve your cash flow, invest in

ministry, operate with less stress, pay off your existing debt fast, and reach more people

with the Gospel message. You’ll also know that you’re ensuring every dollar given is going to

impact and life change and not needlessly spent on mortgage interest.

As leaders, we always are asking people to be good stewards of their resources. Shouldn’t

we lead by example? Shouldn’t we look for ways to minimize expenses and maximize the

effectiveness of every dollar received? That’s why we are here and willing to help.

Conclusion

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1. Follow us on Twitter and Facebook.

2. Subscribe to our blog on rsistewardship.com

3. Sign up for our e-newsletter.

4. Call us at 1.800.527.6824.

5. Contact us to discuss your church’s needs.

5 E A S Y w A Y S F O R Y O Ut o c o n n e c t w i t h r S i

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About the Authors

joel mIkell is president of RSI. With more than 25 years of local church ministry experience, he brings a passion for helping churches cast their vision to reach people for Christ, as only a pastor can. He has helped church leaders raise more than $400 million for kingdom projects and has had the privilege of working with some of the most well -known churches and church leaders across the country. Joel can be reached at joel.mikell@rsistewardship.com,Twitter (@joelmikell), or Facebook.

kevIn lloyd, cpa, is chief operations officer of RSI. Kevin oversees all finance, client services and technology operations of the organization; his team supports all RSI clients by continually improving company strategies. Kevin brings a diverse set of business skills and strong talents in management, analysis, and execution, acquired through years of experience in financial and strategic planning leadership at a Fortune 500 company. Kevin can be reached atkevin.lloyd@rsistewardship.com.

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P R O D U C E D B Y

What is God calling your church to do next?Call us today!

1.800.527.6824 RSISTEWARDSHIP.COM