Posted by Reif on March 23, 1999 at 10:09:27:
Fool’s trap? How so?
$47/month more cash flow doing it this way. I figured I’d be able to refi sometime in the future.
Reif
Posted by Reif on March 23, 1999 at 10:09:27:
Fool’s trap? How so?
$47/month more cash flow doing it this way. I figured I’d be able to refi sometime in the future.
Reif
Refi - or wait? - Posted by Reif
Posted by Reif on March 21, 1999 at 20:00:25:
One more concept I’m struggling with.
I have a rental condo that has a loan of $77,700 interest only for 15 years then a balloon.
If I were to refinance it for 30 years at 7.5%, the monthly payment would be almost exactly the same ($2 difference), but of course, now I would be amortizing the loan at about $58 a month.
At an 18% yield, this note is worth only $40,000, but as of now, the noteholder won’t discount.
One nice thing is I have the first right of refusal if he tries to sell the note at any time.
Question: Should I think about refinancing the condo, or wait?
I’m thinking there is some other way to make this a better situation with a substitution of collateral (which I can also do without his permission - as long as it’s better).
I’d really like to get the condo free and clear to use it as collateral to start a crank.
Any ideas?
Thanks,
Reif
The Discount Substitution - Posted by John Behle
Posted by John Behle on March 23, 1999 at 18:29:37:
This is a good case where the “Discount Substitution” could come into play. Find a note similar to their note and use it as collateral instead of the property. Buy that note at a discount.
Search the archives and there are many posts and an article I wrote on “The Discount Refinance.”
Re: Refi - or wait? - Posted by Rick
Posted by Rick on March 23, 1999 at 09:47:40:
I would refinance. Your interest only mortgage was a fools trap. sorry