Posted by Shawn J. Dostie on December 06, 2002 at 20:41:49:
You should always choose the most favorable financing for yourself (understatement alert) If you can get the best terms from the local bank By all means go for it. But, what happens when the local bank parameters don’t fit your needs? That’s when a good mortgage broker can be worth his weight in gold.
The best way to borrow money? - Posted by Dave M
Posted by Dave M on December 06, 2002 at 20:10:59:
I am looking into buying my first piece of property, and in doing so I came up with a couple of questions about the best way to borrow money.
My first question is why go through a mortgage lender when I could go directly through a bank, wouldn’t I be hiring a middle man that is going to cost me extra money?
One lender I spoke to mentioned his fees for helping me complete a transaction could run up to four thousand dollars, and I would like to figure out how to keep the closing costs as low as possible. Any advise would be greatly appreciated.
Re: The best way to borrow money? - Posted by Space Available
Posted by Space Available on December 06, 2002 at 20:49:12:
One rule of thumb is to structure your financing to mirror the lenght of time you expect to own the property. If you are going to flip it, then you want short-term financing (think banks or hard money lenders). If you think you are going to hold the property long-term then get a long term mortgage.
Loan fees should be factored into the equation. $4,000 in loan fees is way too much for short term financing but might be a real bargain on a long term mortgage say at 5 3/4% - 6 1/4% for 30 years.
The very cheapest money you can borrow is usually from the seller. It’s not uncommon to see zero points and zero % interest for short term money.