All Forum Posts by: Brad E.

thanks alot guys

Hi, I am a total newb here but have been to a couple webinars and recently tried the rental property analysis calc.  When I get the results I end up with a bunch of numbers that I am not sure what exactly they mean - e.g. 'gross rent multiplier' or 'pro forma cap rate'.

So I was wondering if there is a guide here on the BP site that goes in to more detail on what some of these numbers mean in the context of rental properties?  I did a site search but didn't find anything meaningful.  

Hopefully I have posted this in the correct forum.  This site is huge!  Thanks in advance.

Thanks for the input guys.   

I hadn't considered an adjustable rate.  I've been a little frightened by those.  

The rates were from this past Monday they are locked.  The comments about the rates being unreal were from another forum...troll...I suppose.

Thanks again.

Thanks for the feedback.  I definitely see the benefit of the 3.0 and that was initially what I was planning on going with.  

What made me question it was when I was speaking with one of the mortgage officers and he said that if I had plans to hold the property and use it as rental eventually, it was a 'no brainer' to go with the 30 year even at the higher rate.  His logic was that it doesn't matter if someone else is paying the interest.  

The part I liked about the 30 after thinking about it a little more is the flexibility it offers.  Let's say in 2 years I need to move and get a new mortgage on a different property.  In that case, I would be stuck with the higher payment on this property.  The 30 year would allow me to cut back on the payment for this property and put that money towards the new property mortgage payment.  Furthermore, I may look into getting more into real estate investing over the next couple years and may need the cash flow.

I'm not sure what my other options would be if I needed to free up some cash to make the payment on the new mortgage.  I don't know if I would be able refi this mortgage again at the same time as trying to get a new mortgage for a different property.  My guess it that it wouldn't work out.

I should probably also note that I have a cash reserve (60K) in that I can tap if necessary.  Not that I want to do that, but it is there if needed.  I think that lowers the risk of going with the 15 to some degree.

Whatever I do, I plan to continue making the same $ payment I am making today on my current mortgage.  What that equates to is me paying additional payments directly to principle in addition to the regular monthly payment as shown below.

Geeking out on the numbers a little, here are the calculations for the amortization I ran based on the various scenarios.

With the 15 I can pay extra $250 in principal and with the 30 I can pay an extra $450 and still be making roughly the same payment I am making today.  

Given this, and my intention to rent the property long term, would you guys still recommend the 15?  The 30 with the extra payments seems to get a similar result in terms of overall cost, with the the added benefit of payment flexibility.  Surprisingly, the interest comes out to be less at loan payoff and the payoff date is a few years earlier than with the 15 year paying no extra payments.  

The numbers look right to me on the 30 given my goals, but being a rookie, I wonder what other things I need to consider that I'm not.

Thanks again for the feedback.

Hi all, first time poster here.

I am in the process of refi-ing my primary residence. I've got the following options for refinance:

All are conventional loans:
30 or 25 yr @ 3.875 - closing cost: 2600
20 @ 3.625 - closing cost: 2250
15 @ 3.0 - closing cost: 2300

I have already had a few comments from lenders saying the above rates are unreal.  They are real and there is no buy down involved.  I wouldn't waste my time posting if they were not.  Now that I have that out of the way....

The 15 year payment is about $30 more than what I am paying in my current 30 year, which is not a problem for me to pay. If I take the 25 or 30 my plan is to pay it like a 15 year loan regardless.

Although this is my primary residence currently my long term plan is to hold the property when I am ready or need to move and use it as a rental property. I've run the amortization charts on all these so I have reviewed how the #s work out but I'm not sure what the right strategy is here given my plan.

My instinct is to take the lowest rate but at the same time it feels like I should consider one of the longer terms to allow flexibility in the payment, in the case that I elect to mortgage another property to live in.

I'm also struggling with the 'what ifs' e.g. "what if it turns out a I don't like being a landlord?"

The 3.0 looks so juicy but I wanted to get some feedback from some knowledgeable folks to make sure I'm thinking about the right decision criteria. I also want to ensure I'm not making decisions based on emotion.

I've already locked these rates so I need to make a decision on this within the next couple days. I really appreciate any thoughts you can share.

Cheers.