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| *Loan,banking and credit>>>mortgage loan |
Mortgage Brokers Advice Plz regarding a loan/refi 20 yr old investor!? |
I am 20 yrs old I bought a duplex 4 months ago for 147,600 its appraised at 148,000 so I got it at top dollar. I got financing on 80/20 80%@7.5 adjustable rate (will go up in 2 years guaranteed) and 20%@10.75 fixed rate. I will be paying interest for the first 2 months. I am losing $200 on this monthly w/ tenants living there. It's suppose to be my primary residence. Refi penalty for the 80 loan is $3600 and no penalty for 20%. So my question is I got a loan on stated income, I figured I am losing $200/month*24=4800 in 2 years interest only from my own pocket. If I refi now $3600 penalty and maybe $3000 closing cost (estimation) so that's $6600 loss which I can live with 6600-4800=1800 difference I can live with that. But if I refi 30 yr fixed rate I have very low income i am a college student can I get possibly better rates to lower my down payment, I want to refi 0% down fixed 30yr rate is that possible? I want some advice plz I don't want to go bankrupt in 2 yrs when rates go up If you are living there and "losing" $200 you are doing pretty well because it is highly doubtful you could rent a place for that little. It is a good idea to try to fix your interest costs if you can. The first thing to try is contacting your current lender and seeing if they convert your loan to a fixed rate loan. You are upside down and in over your head. You do not need more properties at this time. You do need to grow up and finish college. While you have the right idea you lack the maturity and knowledge to do investments at this time. I am a commercial and investment real estate broker, I know what I am doing and it is abundantly clear to me that you do not. Running the numbers after you have bought the property is after the fact, and too late to rectify the situation; the cow is out of the barn. You have shot yourself in the foot this time. Never invest in property that you have to suppliment the payments. Did I say NEVER?!?! If it will not stand on its own you do not need it, that probably is why the last guy sold it, lack of positive cash flow. Your property is stuck with the appraisal you got when you bought it until it has "seasoned" a bit longer, usually now about a year. Selling under 2 yrs will cost you roughly 8% of the sale price plus payoff of the existing notes and you have no equity. If a gain is realized it will be at your regular tax rate not a long-term investor rate of 15%. Plus you will have the 25% recapture tax on the depreciation (soc sec is not taxed on rental income). IF you can refi you will pay the loan fees all over again- there is no way you are going to see daylight in 2 years, it takes that long to recover loan fees, let alone refi costs, and you already are in the hole. So you are a college student. That scares me. If you are smart enough to go to college you have the potential one day be a pillar of the community. What is scarey is you can not conduct a smart business transaction for yourself w/o going belly up right off the bat. You have asked this or a variation of this question at least 10 times in the last 4 weeks. What are you lookijng for? YOU made this mess, You are the one to clean it up. Have you learned anything from the college of "hard knocks"? To avoid bankruptcy do not repeat this misadventure again, finish college first and then find a real estate broker who will act in your best interest as you either had a broker who was interested in his own benefit or you ignored the obvious and bought this deal anyway against somebody's advice. I wonder if you bought it under false pretenses? If yes that is jail time waiting to happen, just pray that nobody turns you in. licensed real estate broker in TN, and I have kids both older than you and your age. |
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