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Old 12-04-2011, 06:42 AM   #21
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I'm guessing you have a 30 yr loan. Why not refinanace to today's rates of around 4% instead?
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Old 12-04-2011, 09:35 AM   #22
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Originally Posted by gerntz View Post
I'm guessing you have a 30 yr loan. Why not refinanace to today's rates of around 4% instead?
Correct, it's a 30yr fixed loan.

So,you're suggesting pay down the existing loan AND refi the remainder at a lower rate? If I could do that for ~0 refi costs, that might be worth the effort.
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Old 12-05-2011, 02:40 PM   #23
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I'm confused. You got a fixed rate 30 year loan on a rental?

I own two rentals and have never heard of such an option. Rather my options have been a 5-7 year balloon amortized over 30 years. As such, your rate will reset in 5-7 years...so don't bank on that rate being available for the life of your mortgage.

For the above reason (unless you have some really different borrowing arrangement), I'd pay down the loan if you have sufficient cash flow.

Someone else mentioned the liquidity downside, which is a real concern for many. An additional issue is that if you plan on buying more properties, it adversely affects your ability to fund the purchases of additional properties.

As for how I do it, you don't want to know...very complex but it works for me.
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Old 12-05-2011, 05:31 PM   #24
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Originally Posted by Finance Dave
I'm confused. You got a fixed rate 30 year loan on a rental?

I own two rentals and have never heard of such an option. Rather my options have been a 5-7 year balloon amortized over 30 years. As such, your rate will reset in 5-7 years...so don't bank on that rate being available for the life of your mortgage.
Yikes, get a new mortgage broker. 30 year fixed, conventional loans are definitely available for investment properties.
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Old 12-05-2011, 08:33 PM   #25
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Originally Posted by Finance Dave View Post
I'm confused. You got a fixed rate 30 year loan on a rental?

I own two rentals and have never heard of such an option. Rather my options have been a 5-7 year balloon amortized over 30 years. As such, your rate will reset in 5-7 years...so don't bank on that rate being available for the life of your mortgage.

For the above reason (unless you have some really different borrowing arrangement), I'd pay down the loan if you have sufficient cash flow.

Someone else mentioned the liquidity downside, which is a real concern for many. An additional issue is that if you plan on buying more properties, it adversely affects your ability to fund the purchases of additional properties.

As for how I do it, you don't want to know...very complex but it works for me.
I owned for the first 2yrs and kept the financing (with Mtge company's knowledge).
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Old 12-05-2011, 08:52 PM   #26
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I just made this decision and paid off my second rental property 2 weeks ago, after 2 cd's came due and the interest quoted was not worth it. Paid off the first one about 10 years ago..now the cash flow is allowing me to max my 401, Roth, and after Tax accounts fully.
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Old 12-06-2011, 09:43 PM   #27
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Correct, it's a 30yr fixed loan.

So,you're suggesting pay down the existing loan AND refi the remainder at a lower rate? If I could do that for ~0 refi costs, that might be worth the effort.
No, I'm suggesting you refinance at the lower rate & pocket the difference.
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Old 12-06-2011, 09:44 PM   #28
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Yikes, get a new mortgage broker. 30 year fixed, conventional loans are definitely available for investment properties.
Yep. Have 4 of them.
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Old 12-06-2011, 11:16 PM   #29
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I'm confused. You got a fixed rate 30 year loan on a rental?
I own two rentals and have never heard of such an option. Rather my options have been a 5-7 year balloon amortized over 30 years. As such, your rate will reset in 5-7 years...so don't bank on that rate being available for the life of your mortgage.
As for how I do it, you don't want to know...very complex but it works for me.
A fixed-rate 30-year investor's mortgage is so simple that even Bank of America can do it. Although for the life of me I can't understand how they're making any money from us.

As for complex real estate transactions: you're right, I don't want to know.
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Old 12-08-2011, 12:29 PM   #30
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I like paing down the note on your primary residence .... invest in property with others $$.

If you want investment real estate , use the cash for a downpayment on another property. Lots of ways to get POSITIVE cashflow today.

Breaking even is a lost because you're not being paid for your time.
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