Keeping the NON-qualifing assumeable feature? - Posted by EJH

Posted by Dave T on December 02, 1999 at 16:51:20:

Your cash flow goes up $259 per month and you pay off your mortgage two years earlier and it does not cost you anything out of pocket.

Why are you hesitating…especially if your plan is to hold this property for rental income for a few more years?

Keeping the NON-qualifing assumeable feature? - Posted by EJH

Posted by EJH on December 02, 1999 at 15:07:17:

We have a 20 year old 4 plex, we bought 5 years ago by assuming a non - qualifying assumeable loan at 9.5% with 17 years left to go. ( Yea, we bought it wrong) Today’s value is about $165,000.00. We owe about $128,000.00, PI is $1,245.00. The lender (GMAC) is offering a refinance to a conventional loan at 7.75% - 15 year note. New balance would be $132,800.00 and the new PI would be $986.00 and rolled in the closing cost ($4,800.00) in to the loan. ( or keeping the non - qualifying assumeable of course add those cost too)

What Makes sence?

Thanks in advance for you advice,
EJH

Re: Keeping the NON-qualifing assumeable feature? - Posted by Bud Branstetter

Posted by Bud Branstetter on December 02, 1999 at 20:44:12:

If you use the same rule of thumb that the costs of refi need to be saved in the next two years then you would do it. However, you say you have a loan that will pay off in 12 more years. The new loan would be 30 years but reamortized. Some of the savings is just reamortizing over a longer period. The rest is interest reduction. If you can discipline yourself to pay or invest the saved amount then financially it can be worth it. If you plan on reselling anytime in the forseeable future the existing loan make it very much more valuable as far as liquidity.