I currently own $141,000 and have a rate of 6.875% on a 30 year mortgage. I have owed the condo for 1.5 years and have been making principal payments of $100.00 each month. BAE mortgage quoted me 5.71 APR to refinance into a 30 year. If I wrap the closing costs into the load the new loan will be $145,900. I have been asked to pay closing costs of $4,422. Is this a good deal? Thank you.

141,190.00 Existing Liens to Be Paid Off $ 828.40 First Lien P&I
————- Debts to Be Paid Off ————- Second Lien P&I
$ 4,422.75 Estimated Closing Costs $ 146.62 Taxes
$ 1,476.05 Estimated Prepaid Items/Reserves ————- Hazard Insurance
————- Financed PMI/FHA/VA Funding Fee ————- Mortgage Insurance
————- No Cost HELOC Fees Paid By Lender ————- HOA Dues
————- Lender Credit ————- Other
$(145,900.00) New Base Financing

the closing costs seem a bit high. You mentioned a "new" loan at 5.71 APR, but that’s different than the monthly mortgage rate, so it’s difficult to figure your monthly savings. I’m guessing your new mortgage to be 5.5%, so you need to calculate your new payment amount (145,900) at 5.5%= approx 670/mo INTEREST, and you are currently paying on 141,000 @ 6.875% (approx 807/mo, interest). Taking the difference, you’ll be "saving" about 137/mo in interest (807 old mortgage minus 670 new mortgage interest=137/mo less in interest). Now you gotta divide what it costs you to get this new refi, ($4422.75) by that 137/mo savings and you get about 33 months to recapture your $4422 "cost". So, if you are planning on staying in your place for another three years, then it is an "okay" deal, but if you are planning on moving in the next year or two, then no, it’s not a very good deal.

I have 35 percent equity in on on property and i have invested 50,000. I want to get some type of home equity line of credit on that particular investment property so i can reuse to funds if some other deal were to come up.. Does anyone know if it is possible and if it is what banks do this? Any advice would be greatly appreciated.

As long as you own under 10 properties it should be easy.
Email me if you have questions.
brandonbroker@yahoo.com

I am thinking about investing in a rental home (I will be renting it out), but due to the fact that I am a novice, I do not know if I should go for a interest-only loan. What are the advantages/disadvantages?

Anything will help. Thanks.

Interest rates are often variable with Interest only loans. If your payment is $500 a month on an interest only and $700 on a 30 year fixed, when interest rates go up your payment could increase to $700 a month (or more), so you could be making the same payment and not gaining equity in a paid of mortgage.

Also, you will be in debt forever. $500 a month for the rest of your life is…

In investment property you should strive for cash flow and equity, all of which is achieved greatest when your property is paid for.

The ultimate goal of investing in rental property is turn a profit. To make sure that you achieve that goal it is essential that you follow several critical guidelines.

First, always make sure that you check references. This can be a burdensome step that many landlords overlook if they feel as though they have a good instinct about the tenant when they meet with them. Not checking references; however, can lead to a number of problems. You can uncover a wealth of information about potential problems before you rent to a prospective tenant.

Always make sure that you have everything in writing. This is to protect not only your rights but also the rights of your tenants as well. Everything from the code of conduct you expect tenants to abide by while renting your property to the rental application itself should be in writing.

You will find that you have better success with your rental property if you take the time to ensure that it is both secure and clean. The grounds of the property should be free of clear and trimmed regularly. Not only will the property be more visually appealing but these actions will also assist you with property liability. You will also want to take additional security measures. Extra security may be able to lower your insurance premiums as well as provide an incentive to quality tenants to rent your property when they know it is secure.

If you make the decision to hire a property manager, take the time to interview prospective candidates very carefully. Property managers can be quite helpful if you do not have the time to tend to all of the details yourself. The wrong property manager; however, can cause you tremendous problems. This means that you will need to hire a thoroughly responsible and professional individual to handle the job.

Always make sure that you obtain adequate insurance. Not only should you have property insurance but you should also have liability insurance. One incident is all it takes to wipe out your investment. Check with your state to determine if any additional insurance coverage is required.

Regardless of the condition the property was in when you purchased it, there will come a time when repairs are needed. This is part and parcel of owning rental property. If you take too long to make repairs, not only will your property suffer and repairs will ultimately cost more to take care of but you will also likely lose quality tenants as well. By making sure that you handle repairs promptly you will be able to maintain the life of your property as well as retain good tenants.

Always make sure that you follow all applicable regulations in the renting of your investment property. The Fair Housing Administration Act provides precise regulations in order to prevent discrimination. If you violate those regulations you could find yourself facing a lawsuit that is costly in terms of time as well as money. The best course of action is to take the time to do your homework and consult an attorney experienced in real estate matters for guidance regarding the FHA as well as ensuring that you have the proper forms.

Finally, make sure that you do not violate the privacy of your tenants. Check with your state’s regulations to find out whether you must provide any type of notice to your tenant before you enter the dwelling.

Following these guidelines will help you to retain quality tenants and avoid any potential legal problems.

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Our powerful investment analysis tool helping real estate investors make key decisions to maximize rate of return and overall financial safety when purchasing and owning investment properties

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Ok I’m a little confused here. I recently purchased ( in the last 5 months) an investment property with a 2.75% 5 year variable closed mortgage. I was wondering when and in what situation it would be beneficial for me to refinance. Specifically in the situation where let’s say the property appreciates 10% in one year (hypothetical). so let’s say it I bought it at 400k and it’s now worth 440k. Should I refinance even though mortgage rates have stayed the same to take advantage of the equity build up. I know there are two different types of refinancing in this situation cash-out and equity line of credit. I’m kinda confused by the difference in the two. could you explain. Also as the property’s initial value increases does this method of taking out equity become more beneficial (i.e. if the property was worth 1 Million and went up 10% then now its worth 1.1 Million). Is it more worth it in this situation because there is a 100,000 equity build up vs 10,000. Thank you for your help. it’s much appreciated.
ok I don’t think you guys understand my question. Basically asking if your building appreciates and get a an equity buildup whats the best way about getting it out and making good use of it without selling the building. That led me to refinancing although refinancing is usually not meant for this reason. Are there any opinions on this?

Troll alert or working on homework?

You own a $400k investment property and are asking these questions! Either you have a wealthy benefactor or should not be investing without a fundamental knowledge of mortgages and financial calculations.