Clemson, SC · Member since 2016 · 9 posts · 0 votes
Hi, I'm a new investor in Clemson SC (graduated 2005) and I have a $100k paid for rental property in Anderson SC. I'm looking to pull 75% of the equity out to use as the down payments on future rental properties. Here are three options that the bank is offering on a 15 year fixed rate:
3.5%, $375 fee, -> $536 principal and interest payment/mo.
3.625%, $94 fee, -> $541 principal and interest payment/mo.
3.75%, they pay me $188, ->545 principal and interest payment/mo.
What do you think of these options? The bank is going to charge a $749 origination fee too. Does that sound high or normal? I haven't shopped around at other banks either. This is the bank that did the load on the rental (paid off) and my primary.
If you're in the Clemson area and would like to get together and talk about real estate, please let me know!
Hey Derek, first off, Go Tigers!
I usually just run the numbers in an amortization chart and weigh the equity pay down, vs upfront points. Either way, your options are pretty close. Good rates.
I was going to vote for the 30 year even before it was an option. If you feel comfy with the cashflow, you can always funnel money toward it to pay it down faster.
I used the Dave Ramsey plan pay off our primary so swallowing anything other than the minimum interest possible was something that took me a bit to get used to. Making the transition from minimizing debt to maximizing cash flow has been a process. I think the foundation he taught me still helps me keep a healthy level of caution about risk. If I didn't have that I'd probably not measure risk at all and get my head taken off.