Setting up note-payors on EFT - Posted by Craig_NOLA


#1

Posted by John Behle on November 22, 1998 at 14:53:16:

It’s a nice way to make sure you get paid. One enticement is to encourage a shorter amortization. Let’s say you have a 10k note @10% with payments of $87.76 per month. The note would amortize in 30 years. If we were to encourage the payor to round his payment up to $100 and set it up on EFT, it would amortize in 216 months. That is 18 years instead of 30 - ALMOST HALF.

Go further and show the payor the amount of interest he will save. In the original note, he would pay a total of $31,593.60 in payments. $21k of that is interest. After the note is restructured, he will pay a total of $21,600 in payments - $11,600 in total interest. That is a savings of $9,993.60 for the payor for only a twelve dollar increase in his payment.


#2

Setting up note-payors on EFT - Posted by Craig_NOLA

Posted by Craig_NOLA on November 22, 1998 at 02:35:55:

Has anyone ever set any of their payors up on an electronic funds transfer arrangement. Someone asked about it on the other board in relation to tenants. It seems like it would be an efficient and secure way to collect payments and that it could be sold to payors on the basis of convenience, etc.

Any thoughts? Pros, cons, complications?

Thanks.

Craig

P.S. to John: Thanks for answering my question about title companies on the main board.