All Forum Posts by: Jeff Rocheleau
Jeff Rocheleau has started 2 posts and replied 5 times.
Post: Fixed Rate Mortgage Payments Increasing for New Investor
- Posts 5
- Votes 2
Quote from @Nick Belsky:
Definitely sucks, especially if you are in an area that is experiencing increase HOI or tax rates. However, this isn't really a BPC issue so much as your loan officer. Whomever originated your loan should have discussed this with you, not to mention in the loan docs there is a paragraph or two talking about escrows and how they are updated each year to reflect what your HOI carrier and taxing authority bills. You would have signed off on this in your loan package. Assuming you signed a fixed rate mortgage, your interest and principal payments will not increase throughout the entire loan term.
The good news is that you can always reach out to your carrier or even other carriers to shop your HOI coverage to better rates and keep your monthly payment down. There's little you can do with taxes save the county/city saying your property is worth far more than it is and you dispute the value.
While the BPC is a wonderful resource for learning, every single situation cannot be expected to be covered. That's just not realistic.
Cheers!
Thanks for the compassion, Nick. I guess I'm disappointed not just with BP, but with social media in general for not bringing up such potentially devastating glitches in the system. I blame my buyer's broker more than anyone though. He's supposed to be acting as my fiduciary
Post: Fixed Rate Mortgage Payments Increasing for New Investor
- Posts 5
- Votes 2
Quote from @Joan Sambo:
Lol it sounds like you are lashing out at BiggerPockets for your own lack of research and knowledge on how these things work. Your mortgage payment is really just PI (out of PITI). It is your option (or your lender in some cases) to include an escrow account and collect the taxes and insurance payment which are not paid monthly btw, and include it in your total mortgage payment to the bank. The bank only keeps principal and interest which is what never changes in a fixed tate mortgage.
Technically, your debt payment does not go up, your ownership obligations like insurance and taxes can and will go up.
Next time do a little bit more research before buying whatever just for the sake of buying and then coming back here blaming this community for your lack of research. Or just don't invest at all if these things are too hard to comprehend. We can't all be investors..
I'm glad you think it's funny Joan. I feel like your comment embodies the quintessential realtor attitude which is basically, "Yeah I could have warned you, but how would that help me?"
Post: Fixed Rate Mortgage Payments Increasing for New Investor
- Posts 5
- Votes 2
Quote from @Jack Matthias:
Well if you got a fixed rate mortgage your principal and interest did not change. It sounds like we learned that taxes and insurance can and do change.
Thanks jack. My question is - with so much content out there - some of it paid - why isn't this little nugget ever mentioned?
Investment Info:
Small multi-family (2-4 units) buy & hold investment in Verbank.
Purchase price: $490,000
Cash invested: $17,000
current evaluation ~ $590,000
How did you find this deal and how did you negotiate it?
buyer's broker
How did you finance this deal?
FHA
How did you add value to the deal?
increased rents
What was the outcome?
increased tax assessment
Lessons learned? Challenges?
fixed rate mortgage payments can fluctuate wildly
Post: Fixed Rate Mortgage Payments Increasing for New Investor
- Posts 5
- Votes 2
I swear I spent hundreds of hours and watched dozens of videos about getting started with multi family real estate and NEVER came across this issue, WHICH HAS HAPPENNED TO ME TWICE OUT OF TWO PURCHASES.
In 2022 I bought my first 4 family which I occupied. The other 3 rents barely covered the mortgage payments, but I was living (nearly) free so I was happy - until 3 months later when the town reassessed the property and my mortgage payment went up by almost $300/month or 10%.
Fast forward 2 years and I buy a 3 family which I move into. The 2 rents nowhere near covered my mortgage payments, but the income from my first property offset the difference - until last month. The town reassessed the new property adding $200/mo to my payments, AND my insurance premium on the new building doubled, increasing my already too high mortgage payment by almost SEVEN HUNDRED DOLLARS/mo!
This blows my monthly budget out of the water. I was forced to sell the second house and move back into the first one. Lucky for me I didn't lose any money on the sale, but I am pissed at Bigger Pockets and their kind for not making us newcomers aware of these kind of real estate pitfalls.