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Author Topic: Intrest rate  (Read 15053 times)

Offline neodemes

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Re:Interest rate
« Reply #15 on: March 04, 2004, 07:41:27 pm »
THWACK
I've pretty much said what's on my mind, I think. To go on would be overkill...however...

I get your perspective...I came into it from the consumer angle and, call me a bleeding heart, but I still see it as a choice of the desperate...bad credit...sees...no or low money down (great!)....lower than market initial interest rate (great!)....no balloon payment to scramble financing for (great!)....first couple of years interest goes up a point a year (OK. not bad)....is going to reach a point where interest rate is no longer favorable and is almost back to square one...has to choose (if there is even a viable choice...maybe position is still desperate) financing elsewhere with balloon payment or sticking and watching the interest rate climb for...how many years and reaching what interest rate (do you cap it at any point)...Anyway, just seems like the folks with the most misery are the ones that get the THWACK
You can post a reply and reiterate your points if you like...but, really, I understand...it works for you, and its a choice for folks that might have no other options. That can only be win-win, right?
~ neodemes ~
Neodemesne: Your Real Estate Portal
Where Sellers, Buyers and Real Estate Investors Come Together
http://www.neodemesne.com
http://www.rei-resource.com/rei-forum

Offline David Alexander

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Re:Intrest rate
« Reply #16 on: March 04, 2004, 07:52:46 pm »
I think you did miss a point.....

It caps... at the 5th year...  usually 10.5% or 11.5%....

Putting balloons in loans are far worse than a rising interest rate.... that will cause immediate doom.....  and cause foreclosure quickly.....  And the other prepayment penalties...  are the other answer....  

This is the solution by most B and C paper lenders....

David Alexander

P.S.  how did you do that moving Thwack thing.... way cool...




Offline neodemes

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Re:Interest rate
« Reply #17 on: March 04, 2004, 08:05:30 pm »

For Instance.... 2 years ago....  we owner financed property at an average of 10.5%

for 30 years....

Lately.... Most of the Notes we've been carrying have been  starting at a maximum of 8.5%.....  so, that we can get the people in...  Then we graduate it yearly....

9.5, 10.5, 11.5... for the remaining balance......

Er....Caps/5? Did you state that after the above? That kind of makes a difference. I'm sitting here thinking some schmuck is, in theory, stuck with a point per year increase for thirty years.  :o

oops..  :-[ ..found it
Quote
Year 2 - 5 it goes up 1% and stops in year five for the remaining balance



Look for the <-M button
« Last Edit: March 04, 2004, 08:15:39 pm by neodemes »
~ neodemes ~
Neodemesne: Your Real Estate Portal
Where Sellers, Buyers and Real Estate Investors Come Together
http://www.neodemesne.com
http://www.rei-resource.com/rei-forum

Offline David Alexander

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Re:Intrest rate
« Reply #18 on: March 04, 2004, 09:08:51 pm »
You'd bump into usury laws about 8 to 10 years into it.... depending on the state....

They are actually winning....  unless they let it run a long time after the 5th...

David Alexander

P.S. that explains alot... :)

Offline David Garcia

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Re:Intrest rate
« Reply #19 on: March 05, 2004, 05:09:55 pm »


Usually buyers won't mind paying 10-12% interest on owner financed homes.



www.classifiedclub.com/mall2/realestatecoaching.html

David Garcia

Offline David Alexander

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Re:Intrest rate
« Reply #20 on: March 07, 2004, 05:20:44 pm »
depends on the market.....

In Dallas that's no longer the case....

It's now a buyers market..... and the taxes and insurance take up another 3 - 4%...

So at 10% it's like pyaing 13 - 14%.... Gets a little steep.....

So a 100k loan has a payment of $1300 - 1400 when you include PITI....

Not pretty....

David Alexander

 




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