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A Brief Commercial Mortgage Guide
Commercial mortgage loans are used when purchasing structures such as office buildings, apartment complexes, health care facilities and retail outlets. Whether it’s a hi-rise tower or a family-owned restaurant, buyers typically need additional...
Are you searching for a mortgage in Memphis?
Are you searching for a mortgage in Memphis? Finding that perfect loan does not have to be a difficult task. You have many options to get a mortgage loan if you are living in Memphis. Basically there are 3 methods available to you. You can visit a...
Bad Credit Mortgage Loan - How To Get One
A few years ago, if you had a bankruptcy or a foreclosure on your credit report, you could forget about trying to get a mortgage loan. If you were lucky enough to find someone who would finance you, your interest rate would be through the roof and...
Maximize Your Chances of Qualifying for a Great Mortgage Loan Deal
Most mortgage loan advertisements promise rock-bottom interest rates, low down payments, and virtually guaranteed approval within just a few days. But for many prospective homeowners, the trip from advertising promises to “sign-on-the-dotted-line”...
Refinancing Your House - How To Know Whether To Refinance Or Get A Second Mortgage
Refinancing your house’s mortgage is not the same thing as getting a second mortgage. While both allow you to cash out your home’s equity, terms and rates differ between the two types of loans. To know which financing option is best for you, learn...
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Lower Mortgage Payments can Increase Wealth
Creating and maintaining wealth is a very difficult task. Ask any millionaire!!! The delicate balance of living a dream lifestyle and holding expenses tight creates this difficulty. As a financial advisor, I have assisted people accumulate monies to live their dream life while discovering ways to reduce their necessary expenses.
Everyone would agree mortgages are necessary expenses. Probably the biggest expense most of us have. Mortgages present the opportunity to secure income tax deductions while utilizing the house to live.
What if you could reduce your mortgage interest rate to 3% and be required to pay interest only for 5 years? Would you refinance your current house? Purchase another?
While refinancing a client’s mortgage, I discovered such a mortgage. The client will save lots of money the next few years. Here is his scenario:
Client #1$500,000 Loan Amount
Past30 Year Fixed @6.00%=P&I$2,997.75/ month
5th year loan balance$ 456,989.77
Equity (assuming no appreciation)$ 43,010.23
Current
LIBOR ARM@3.00%=Interest only$1,250.00/ month
Applied additional $1747.75 / month to principal for 5 years
5th year loan balance$ 362,370.82
Equity (assuming no appreciation)$ 137,629.18
I proposed this loan program to Client
#2.
Client #2$1.2 Million Loan Amount
Current
5/25 ARM@4.25%=P&I$5,903.28/ month
5th year loan balance$1,064,681.48
Equity (assuming no appreciation)$ 135,318.35
Proposed
LIBOR ARM@3.00%=Interest Only$3,000/ month
Applied additional $2903.20 / month to principal for 5 years
5th year loan balance$ 971,261.81
Equity (assuming no appreciation)$ 228,738.19
You can see from these scenarios this mortgage can be a great tool to reduce your monthly mortgage payment or to shave down the loan balance thereby increasing your equity.
This mortgage interest program is termed negative amortization. Rather than paying off the interest over the time period, you are paying of a small portion of the interest but not the required amount. Interest rates can go as low as 1.25%
If you want savings refinance your mortgage.
About the Author
Ida B. Byrd-Hill was the President of The Harvard Group Wealth Management L.L.C. for 10 years. She created investment portfolios, insurance plans and residential/ commercial financing. She is President of Livinginstyleonline.com She has served as guest columnist for the Michigan Front Page for 2 years and a speaker for the Better Investing television show hosted by David Chilton, author of The Wealthy Barber.
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