All Forum Posts by: Varun Parkash

Locked 3.875 interest rate :) by paying $1300 That refund of $1300 was only there if I take 4.125 interest rate Hope now closing doesn’t backfire !

It seems I have to pay $650 for every two weeks of delay in closing to bank. In an event of delay in closing by 8 weeks - I incur a $2800 fee to bank. My maths tells me that 260k at 3.875 is going to be $7500 cheaper than at 4.25 interest rate So going by this logic - risking $2800 fees makes sense as with the way feds are acting - not sure if I will be able to lock in 3.875 around March - April 2018 as they will have more meetings to increase it. I don’t want to have 4.25 I believe they have 4 meetings per year.

https://www.google.com/amp/s/mobile.nytimes.com/2017/12/13/business/economy/fed-interest-rates.amp.html Since this disaster is out now better to lock

According to my realtor - his previous clients got the slab house built in 4 months !!

LO said today it’s a fraud for him to write that rate lock in and $1300 credit in disclosures. He is cc”INg his boss / branch manager - so I believe him Now the catch is LO himself said that your builder is notorious and known for 2-3 month delays & has several complaints on state real estate commission board. Now his new offer is : “rate lock extension fee ($260000x .25% = $650) & my manager has GRACIOUSLY agreed to pay for 2 the weeks” So basically my rate lock in till June 10 if delayed by 2 more weeks - bank will pay $650 fee for that if it incurred. Bigger Q: should i now roll the dice and pay $1792 inclusive of appraisal fee and lock in 6.5 months of 3.875 rate ? Or should I wait till April of next year? My main risk is builder delaying closing by 2-3 months and then I will have no choice but to stay with same lender and pay extra fee incurred for every additional week after 6.5 months of rate lock expires or forfeit my $1792 dollars and look for new lender at delayed closing time. What should I do?

Originally posted by @Kay Kay Singh:

@Shiloh Lundahl Congrats and thanks for sharing you story but look at my best deal.

My best deal in 2017 was a house bought at an auction for $23000 and spent about $2000 on fixing the plumbing under the house and rented it for $760.00 a month and after 3 months appraised for $46000 and used that house as downpayment and bought six more SFRs with no more money out of my pockets and bringing in a rent of $3100 a month.So basically with out of pocket $25000 bring in a rent of $3860 per month.

 Oh wow, that's something unheard of Kay Kay Ji, great work ! Congratulations ! What city did you do this in? 

Originally posted by @Paul Defngin:

Varun Parkash that sounds like a pretty awesome deal but how much is the price of the house and the loan amount? By the way, if delivery of the house is delayed for whatever reason, you could probably have your lender extend the rate - usually at some additional cost if rates are higher then.

I’d ask the lender what the cost of extension would be if you need it. That may help you make an informed decision.

In any case, have everything in writing on company or lender disclosures. Do NOT just accept someone’s email. Your LO could leave the company, lose their job, etc.

 Thanks Paul, thats a solid point about LO leaving job etc. To have them in lender disclosures is the best bet. House Price = 308K (i am estimating closing costs at 7k), loan will be 247K. Let me check on what additional costs are there for extension

Hey mike it’s a tiny 247K loan - no points - no fees !

Oh well the builder said it’s going to take them more than a month to get approval from city - before they can start building - so I no longer can go for this rate lock thing. Let’s see what am I offered in late Jan 2018. I hope feds meeting this time don’t kill my deal like the last time when I locked in 2015 December.

Thanks Bart and Jay for insights. I heavily researched Dallas market & the property taxes as Jay pointed out already is an overkill for an investor. Any deals in there that existed 1.5 years ago are certainly gone. I would have negatively cash flowed by $250 per month if i would have bought in cedar park 78613 neighborhood. To buy at the extreme high curve of a bull market is certainly not the wisest move - but just like 2015 onwards, we have been hearing in another 2-3 years market is going to crash and here we are in 2018 with no apparent crash. On the other hand, migrants and investors from NY/nj/CA have flooded TX/Carolinas/CO real estates in the last 2.5 years. With tight mortgage rules - I personally don’t think the prices will ever drop as low as 2012 (during that time Irvine, CA dropped by 20-25%) in next decade. We have low inventory issues - foreign cash buyers - a rising economy & low interest rates with a pro-property president - having said that the norm of 7 year bull and 7 year bust cycles has already been jinxed & there are still newer local markets in some states where appreciation is on the up due to good schools - demand vs supply & high median income.