All Forum Posts by: Freeman Schultz

Thank you for your response. Ok. I thought they were the same thing. Appreciate you clearing them up. Yes. I am asking about a balloon.

What you said about the lender makes sense because my understanding is that these loans are not standard so the requirements are different

for each type of loan.

How early do mortgagors contact the lenders or do they just wait when the mortgage is maturing? Or does it depend on the lender?

I am assuming for the mortgagor it is best to start the process as early as possible.

Thank you again for your response.

I do understand the basics of a mortgage. But from what I have read online about jumbo mortgages is that they are for a shorter period of time and once the period ends, the principal is due. Maybe I read it wrong. Are jumbo not short term mortgages? When they reach maturity date is the principal due or the rate just changes?

Thank you so much for responding to my post.
I am a bit of a newbie when it comes to real estate investing. I am reading about mortgages and from what I have read about jumbo and I am just curious about the process of when they reach maturity. I have been told that mortgages are usually satisfied by either refinancing or the property is sold. Jumbo mortgages are different animal altogether because after a short period of time, that principal is due.

I have been researching jumbo loans and I understand how they generally work. But they raise some quesitons.

1. When does the lender contact the mortgagor regarding the principal? A year before the maturity date or the month when the principal is due?

2. How early does a mortgagor usually begin the refinancing process before the maturation date?

When a mortgage starts to approach its maturity date what is the process for the principal to get paid off?

Does the bank contact the holder of the mortgage or is that the responsibility of the holder?

How soon does the holder the mortgage begin the refinancing process?

If the holder is unable to refinance and is unable to pay the principal, how soon do they have to put the property on the market?

For an owner occupied building, do owners pay rent to themselves or do they waive it? Are there any tax benefits or liabilities of doing either? Is it easier for an owner to pay rent to themselves in terms of accounting?

I am watching an episode of "The Office" where Dwight now owns the building that the Scranton branch of Dunder Mifflin. One of the running jokes is that Dwight has installed motion sensor lights in the the office in order to cut down on electricity. Every time the lights shut off, everyone has to wave their arms and jump up and down to activate them. I know that self storage facilities install them in their hallways and in some office buildings they install them in their restrooms. I am wondering has anyone installed in their hallways and does it really cut down on electricity costs?

Thank you everyone for your responses.

I have a better understanding how a landlord gets compensated.

It is also really important to talk to a CPA to understand the tax benefits.

I get it now. That makes sense. 

Thank you. That makes it very simple understand.

However, now that I am thinking about it, is their a special way the landlord gets paid? Do they just write a check for themselves

from the account that collects the rent?