Refi a few questions

Financing, Hard Money Lenders, Private Money
1

I asked a few questions a few weeks ago on when to refi, and will be doing so ASAP as I plan to call lenders soon.

Sorry for all the questions as this is all new for me, hopefully if I am able to rent my condo out, this will be a start for me.

Here is the situation for me.

In Oct 2003 I bought a brand new condo in Sterling Heights MI purchase price of $158,100. I financed through a 3 year ARM at 4.5%. My monthy payments rights now are $1,080 as I am paying PMI. My dues for the association are $134

I will be getting married in June this year and shorty after will not be living in the condo. Problem in MI right now is NO condos in the Macomb and Oakland counties (north of Detroit) are selling right now. At least for what people want. A lot of people I have talked to and know can not sell their condos. In my my unit (8 condos attached) 6 are for sale. I am sure there are many mor for sale that I do not know about. They are not selling in this area and my friends that have sold their condos sold it for what they paid for it and lived in them for about 3 years. So since selling will not be easy I plan to hopefully rent my unit out. One unit 2 down from me was able to rent their townhouse out for the same price that the builders rent the apartments out for. What the builders did was use half of units and make them condos and the other half are apartments. The apartments are still being built and people are still moving into them. My unit rents out for $1095 for 2 a year leade and $1210 for a one year lease. So i think if I am competive with those prices I will be able to rent it out.

-My insurnce now is about $400 but that would drop a lot if I claimed it as a rental correct?
-I can write off the dues I still pay if it is a rental correct?

So I intend to refinance soon. I owe $143,000 or so from my loan. So basically I have paid off about 10% of the orginal price. I plan to drop another 1k (tax return) into the mortgage before I refi so looking at 142k

If I can rent it out I would like to keep it as a rental for a while.

With all this in mind what should I be looking at? Whatever gives me the lowest mortage payment? Should I get rid of the PMI and do something different? What are my options?

If I do interest only I could pay off principal myself from the difference I get from the renter, and by doing this it would help if there is ever a vacancy?
30 year fixed an option here? Or should I try a 5 year ARM

What can I expect when I refi in total costs? Should I try my original lender first? Do they have to appraise the house?

Let me know if more information is needed I tried to put everything I could think of

On a different note if I have a problem with my garage door opener I should have it fixed when it is a rental so I can write it off?

Thanks,

Dave

2

I JUST SENT YOU A PRIVATE MESSAGE

3

Well Absolom is new. Jumping right at potential clients.

Way to go.

So it says your a commercial lender, this the residential side of the forum. There is a Commercial section on the left toolbar. Good Luck.

4

Patrick, I was not aware that you were the Reiclub moderator. Oh wait, your not.

Since you are so interested… I do residential as well as commercial lending.

You’ve been a member for about a week longer than me. If I am new, then so are you.

As far as I could tell no one responded to this gentleman’s questions, so I did.

I do not post as much as you because I am busy assisting my clients. I do not have as much free time as you apparently do. If anyone is “jumping at potential clients”, it is you.

According to moderator kdhastedt:

“You’re also welcome to contact folks through email and
Private messages if they specifically requested information.”

Looking at your previous posts, you have sent plenty of PM’s, and posted in the commercial and residential forums. Yet you criticize me for doing the same. I see from your profile that you are very young. Perhaps as you grow older you will not be as much of a hypocrite.

“Arguing online is like the Special Olympics; Even if you win you’re still retarded.”

5

Thanks for the info guys

6

I am not new, and age is not a factor in any of this.

Please invite me to your next special olympics event.

I doubt you are surfing this site on a Sunday & at the same time assist a client by phone/in person.

“Excuse me, can you please hold on while I surf REI Club.com”

Lets just leave it at that. Good Luck.

7

Patrick/Onaje, you are both being ridiculous. I have noticed that in the last several weeks there has been an influx of ambulance chasers. As soon as a someone posts a question there are 2-3 responses of “check your email”. This website is not a lead source

Onaje quoted one of the moderators

According to moderator kdhastedt:

“You’re also welcome to contact folks through email and
Private messages if they specifically requested information.”

This means if the poster requests you specifically to contact them then do so. It does not mean jam their inbox with solicitations.

These posts are for question and answer. If the poster likes your response and would like more information they will contact you.

:frowning:

8

Nice post Hammertime! Someone IM’d me last week, by accident, trying to get me to do a loan with them. :bash:

Any how,

So I intend to refinance soon. I owe $143,000 or so from my loan. So basically I have paid off about 10% of the orginal price. I plan to drop another 1k (tax return) into the mortgage before I refi so looking at 142k

I would keep that money. Applying it towards your mortgage just before refinancing is going to have minimal impact on the transaction. It would be better spent in your pocket.

9

If condos are not selling well in your area turning yours into a rental would be a good option. A problem could be sales comps for an appraisal but if you get an appraisal for at least what you paid maybe a good interest only loan would keep your payments low and you will get the appreciation on your property with more time. The more you can show your place is worth in an appraisal the better the loan products available to you. Your best bet is to start looking at refi options are currently available to you and exactly what that will do for you payment wise…and then weigh your options. You may find it is best to not lose any money and get out???

10
Whatever gives me the lowest mortage payment?

If you are going to rent it, yes. You want to maximize cash flow.

Should I get rid of the PMI and do something different?

Absolutely! PMI is a waste of money. Depending on your parameters you may be able to get a LOC second.

If I do interest only I could pay off principal myself from the difference I get from the renter, and by doing this it would help if there is ever a vacancy? 30 year fixed an option here? Or should I try a 5 year ARM

Contact your old lender and shop around to see what programs are available. You may be spinning your wheels worrying about programs that you are not eligible for.

11

Well its not just to get payments lower now for rei options… Since I started the mortage I have yet to put extra principal down and with the tax return coming in, I want to do it now. Still say no for it?

Thanks

12

That payment of 1K will lower your payment approx. $6.00 a month. Use that money to pay down a credit card or some other higher interest debt that you may have.

13

I have no other debt, no CC and car is at 3.95%

14

If you are going to refinance the property any way…invest the money. Put in your checking account, etc. This can be used to show cash assets when you go to refinance.

15

So it is better to pay the 1k after I refi?

16

golf,

if you pay it after you close it will just shorten your amortization. if you are dead set on paying that 1K on your mortage then do it at closing to lower your loan amount. i think the point that myself and everyone else is trying to make is that there are much better places for you to put that money than on your mortgage. places where it will earn you interest.

17

As everyone else said, keep that 1k somewhere else. With the soft rental market, you may just want to keep it handy in case the apartment is vacant for a month or two for whatever reason.

Also the insurance will probably be higher on a condo if it’s not owner occupied. You probably should get some kind of liability insurance. If someone tripped and fell inside the unit, guess who they can sue?

Otherwise, probably a good idea to just rent it out for now. Shop around for rates, the lowest rates are typically regular mortgage products with 80% down and all that. Interest only loans typically have a slightly higher rate than conventional loans.