Posted by Brent_IL on September 22, 2003 at 22:42:06:
The prime may go up, but it will probably go up gradually. I’m not real big on straight L/O’s, but this might be the way to go to avoid recapture. Maybe you could go to $125,000. If you get an option payment of $2,000 or more, you’d have your repair money back.
I?d stockpile the $300 a month instead of paying down the mortgage. If rates zoom up, use it for the loan payment or to pay the taxes if you sell. Right now, paying it on the loan would only give you a return of .15% over prime and that?s locked up in the house until you pay for its release. Should the new tenant move, it won?t be available to help. If you look around, you might find a better L/O or L/P that you could get by paying an extra $300 a month that you?ll have from the cash flow of your current rental property.