I need advice please

[Sue Bladek]

I purchased 2 duplexes on a land contract. 6.5% $1600.00 payment. 7 yr contract 15 months into it. Talking w bank re:conventional mtg. Now that I have enough equity & seasoned I am able to refinance. Closing costs $2200.00 each. No Pts 4.5% 30 fixed $1060.pmts. Called the owner to inform him that I would be switching from land contract to a promissory note and a mtg. and paying him off in a few months. He doesn't want me to do this, says it will cost him 20%, put him in a higher tax brackets and affect something to do with his Medicaid. He asked what would it take to keep the land contract in tact? "Match what the bank is offering". He countered with 5% and wants me to sign a contract stating I won't refinance for 5 years. Not sure what to do??? Suggestions welcome! Sue

[Bob E.]

Is your note full Am over the 7 years?

Ae you cash flowing with a 7 year duration?

If so I would negotiate the rate down and keep the duration, in another year you would be almost halfway through the mortgage with a little over three years left, why string that out for 30 years?  

In the current scenario it looks like you save $600 a month for 3 1/2 years then pay and extra $1,000 a month for the next 26 1/2 years.