All Forum Posts by: James Neff

From what I have been hearing from my mother in law (who is a realtor) the bank needs to generate some cash fast which is why the closing costs are so high. I have also heard that this bank is actually getting guaranteed loans through Suntrust.
The other question, based on my bad math, would it be financially viable to do it.
Current loan = 15 yr @ 5.75% @ 135k (12 months x 15 yr = 180 months x 1100 = 198,000 total paid to the bank. (63000 in interest)

new loan = 30 yr @ 3.875% @ 103k ( 12 mo x 30 yrs = 360 months x 710 = 255,600 total paid to the bank) (152600 interest) THIS seems wrong somehow...
So is that additional interest to the bank really worth refinancing to save 390 a month over the long term?

-James

Steve Babiak, I agree and the NEFF thing was funny!. If I could get rid of it, I would! Unfortunately, I am stuck with it for a while, So I have to do what is necessary to lower my loss.
The question is, are the closing costs too high, and would it really be worth it to refinance, or ride out what I already have?

Quick Update: Wondering what I should do.

I just spoke with the bank that has my Mortgage, and they have decided that I am indeed now up for a refinance, BUT, things don't sound right to me.
Let me explain.
The bank is under scrutiny by the FDIC for financing alot of properties for rediculous amounts over what they are worth, something fell through and all of those claims are coming due. I.E, the bank needs to generate alot of money all of a sudden, and I don't know all of the details to go further into the story.
As I mentioned above, I have a 15 year Fannie Mae Loan @ 5.75% and monthly payments of 1100 a month, I could have the place paid off in 9 more years and have a $-450 cash flow from rents. Yes, Im losing 450 a month.
The bank is offering this:
30 Year fixed rate @ 3.875%, no PMI( I've already payed enough to waive this) for $710 a month.
20 Year fixed @ 3.75% for 839 a month
15 year fixed @ 2.875 for 939 a month

All of that sounds great, and the 30 Year would make it to where Im only losing $60 a month instead of 450.

Here is the part that bothers me. If I do "out of pocket" for the closing costs, it would be somewhere around $3500, If I have them include it with the mortgage, it will be somewhere around 5-6k.
They also said something about 2% discount points, that if I optioned into would raise the interest rate by .5 to 1% but possibly lower the closing costs.
The new loans is a Fannie Mae Heart loan. I can't really afford to pay closing costs out of pocket, so I would have to include it in the Mortage.

I like the 30 Year loan option, but I am wondering if it is really worth it.
If this were your situation, and you couldn't sell, what would you do?
Advice is welcome!

James.

Oh, the Problem, Do those closing costs seem high to anyone else?

Welcome Dustin,
At your age, you have alot of time on your hands (God willing) to absorb as much knowledge as you can. You also have a disadvantage, as you have no established credit.
If I were your age again, I would be looking into college Courses now that will help you in the future. Business degrees, etc.

Ask yourself these questions:
How are my grades in school?
You are a Junior if my memory servers me correctly, How many credits will you need to Graduate next year as a Senior?
If you only need English, like I did back in the day, look into taking some early college courses at your local community college.

Last but not least, Don't get dscouraged!

James

@ J Scott. What do you mean by always fund rasing these days? I'm curious if there is something im missing, or wasn't aware of. :)

I definately don't think the zestimate is correct. Here is why. The townhouse I own is 1 of 18 in 3 buildings in my HOA. The zestimate says mine is worth 102K. Great for me if I were trying to sell and someone was dumb enough to not pay attention to the TH that just sold right beside mine for 40K. If i had any form of $ right now, I would be gobbling these things up, even if I offered 50K to each owner, Id still be coming out ahead!..
Note: They are downtown in a decent touristy town and I could easily fix and furnish them and set them at a weekly rate of $300-400 for seasonal rentals, which would above and beyond cover my mortgage and housekeeping crew.

I currently have my 2 rentals set up like this: (mind I just started doing this)
I sent out 3 pre-stamped, pre labeled envelopes to each of my tenants. (3 months at a time). In a larger manila envelope.
Inside the manilia envelope, I sent a letter advising that I was changing the way I collected rent.
Note: my mother in law, who is also a RE agent, was collecting the rent for me, but due to a PM working with her, feels it unfair.
The letter stated that I would require either a money order, or a Cashiers check made out to myself starting on April 1st.

I was also looking into the ATM card thingy with my bank, but haven't had a chance to talk to them about it yet. I let both my tenants know that it might be a possibility in the near future, so they won't be upset if I decide to change it again, as it would be easier on all parties.

welcome TJ!
I am in the Norcross area myself, and just starting out as well. I haven't looked into the GAREIA yet, as honestly, I didn't know it existed :/. That and my 2 rentals are in NC. I am almost afraid to look at houses on this side of ATL. All I really see are alot of empty buildings for lease.

You could also go the route of increasing thier rent after the lease ends. I don't know if you have that written in the lease agreement or not. The last apartment complex I lived in was purchased by new owners. They sent out a notice letter 30 days before my lease was up informing me that they were increasing the rent by $40. As I was already planning to move out, it didn't affect me, but it was still one last straw that convinced me to leave. They were way over priced for the area I was in anyways.

Hey Kevin,
Welcome to BP! That villa is amazing!