discount points and >80 LTV - Posted by Jay Hartwig

Posted by Jeff on June 23, 2001 at 22:53:53:

Don’t forget you might have to pay a mortgage tax. In some states this can be as high as 1.25% of the loan. There might be other additional fees besides the points you are going to pay.

One route would be to create an owner financed note and sell it at the closing table (simultaneous close). This way the seller gets their cash, and you get your loan, with no points or taxes. This is just another way to do it. Email me with other questions.


discount points and >80 LTV - Posted by Jay Hartwig

Posted by Jay Hartwig on June 21, 2001 at 16:59:27:

Hi, all. I posted a question regarding loans to another forum, and found this forum is much better suited. I recently signed a contract for a 5 year old HUD home in MS; $91k. I wish to use it for a rental property. The rental and housing market is great, with prices appreciation very well. The rented home is worth $1125-1150/month. I have been shopping for 15 year fixed mortgages. Currently, best deal is 6.625% and 1.5 points. On top of that, this deal is from my own local bank. My question is related to the down payment. I am prepared to make a down payment of 20%. However, I have the option of going to 90% LTV, with a hit of 1 point. Additionally, I have the option of going with even lower rates with discount points ranging as high as 4.5 points. I wish to carry out the loan to at least 10-12 years. Any advice? Higher points, higher LTV? On one hand, conservatism tends to make me put down the 20%, avoid the 1 point hit, and keep mortgage payments low, around $640/month, or less. The more aggressive side of me tells me to finance as much as possible. Allow someone else’s money to work for me, and keep my cash for more deals. I’m almost 2 years out of college, and following my parent’s footsteps. Their hard work and aquisitions have made my journey easier. I’m taking advantage of it NOW. I want to keep buying properties until I get tired of being a landlord, or until the sky falls.


Re: discount points and >80 LTV - Posted by Nate(DC)

Posted by Nate(DC) on June 21, 2001 at 21:43:14:


If you want to keep your payments low, I do not see why you are looking for a 15 year mortgage. Why not go with a 30 year mortgage to lower the payments even further? If/when you decide to pay off additional principal, you can do so, but you will not be REQUIRED to do it, and if you ever get into a cash crunch you will be glad your required payment is lower.