Mistakes, Real Estate and Options ARMs

by Dual Income No Kids on January 13, 2007 · 0 comments

I just wanted to give our readers a quick update on progress refinancing our investment property. As you may have read, we decided to get out of our option ARM and have taken steps to do so by getting a fixed rate loan.

A couple of brief points. For this note, we were able to negotiate a rate of 6.00 on a loan value of $161,000. Since the loan is an interest only for the first ten years, the interest payments will be $846.75. This is far better than the rate and payments on our current option ARM, which are 7.25 and $970.00 respectively.

Right now, I’ve been faxing and emailing a lot with the lender, closing attorney and of course my darling wife Miel, who is currently a half a world away helping the Congo to improve their educational systems. If you’ve ever gone though the borrowing process, you know that lenders require a lot of information, so there are a fair amount of loose ends to tie up.

In terms of a final thought, I don’t recommend refinancing often. A BIG mistake we made was by taking out an option ARM our investment property. Now, we are in a position where we’re needing to throw a significant amount of money at our property in the form of points and fees, and although the rate is marginally more favorable, we’re stuck with investing the time and energy into trying to make the situation work. In the future if I do invest in real estate again, I’ll just get something with a fixed rate mortgage and sit on it until the note is paid off.

Have a great weekend!

Best,

James

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