February 5, 2012

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Reduce Long-Term Loan Expenses With A 15 Year Mortgage

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For as low as 30-year fixed rate mortgage rates are in Arizona today, 15-year fixed rate mortgage rates are even lower, and these lower rates can help you increase your properties return to you over time.

Going by Freddie Mac’s mortgage rate survey, the average 15-year fixed rate mortgage rate is now 3.27% nationwide with an accompanying 0.8 discount points. 1 discount point is a closing cost equal to 1 percent of your loan size. That is a large difference.

The current 15-year fixed rate reading is just one tick above the all-time, 15-year fixed rate mortgage low of 3.26% set in 10 / 2011.

If you’ve ever thought of “going 15″, it’s a terrific time to talk to your lender.Comparing 30-year fixed rate mortgage to 15-year fixed rate mortgages

The primary benefit of using a 15-year fixed rate mortgage as opposed to a 30-year fixed rate one is that a 15-year fixed rate mortgage dramatically cuts the long-term interest costs of your loan. The downside is that monthly payments are relatively large.

At today’s mortgage rates, per $100,000 borrowed :

  • 15-year fixed rate mortgage : $704 principal + interest monthly
  • 30-year fixed rate mortgage : $477 principal + interest monthly

So, for many investors opting for a 15-year fixed rate mortgage, the monthly principal + interest payments will be 48% higher compared to a 30-year fixed rate mortgage of the same loan size, with less going to interest and much more going to principal.

Long-term, however, because the 15-year fixed rate mortgage interest rate is lower and because it pays off in half the time of a 30-year loan, a homeowner will save $45,000 in interest costs per $100,000 borrowed.

$45,000 per $100,000 borrowed is a significant amount of savings.

But the 15-year fixed rate mortgage is not the best for everyone.

Because it requires higher monthly payments, a 15-year fixed rate mortgage may add stress to your household budget. Furthermore, once you commit to a 15-year loan term with your lender, you can’t revert back to a 30-year loan term without a refinance and refinances can be costly.

Therefore, be sure of yourself when selecting a 15-year fixed rate loan. The rewards are great, but the risks can be, too.

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Filed Under: Investment Financing, Mortgage Rates, Real Estate Cash Flow Tagged With: , ,

From High Returns To Bad Leases: Recent Investment Articles.

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Leasing is an important part of any real estate investment.  It that an understatement!  It is your business in the rental property sector.  The property is but a vehicle with it’s own benefits, but it is the tenants that provide the income, the cash flow so managing that part of the business, well, is crucial.  The article below covers a very common occurrence.

How To & How Not To Lease Out Your Phoenix Home?

There are many ways to invest in real estate.  One is to simply be a money lender.  While this is not truly real estate investing, it is a way to get a decent return on a secured asset.

Invest in Phoenix Real Estate Indirectly: Be a Money Lender With 8-12% Annual Return

While the reports below cover the single family home market.  It is just as important to follow because these numbers influence every facet of the multifamily sector: rental rates, vacancy, etc.

Read Current Phoenix Housing Reports

In the coming week we’ll update the sales numbers for both December 2009 and January 2010 for the small multifamily sector in Greater Phoenix.

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Filed Under: From PMT, Investment Financing, Management, Tips Tagged With: ,

Phoenix Income Property Investment Overview

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If you do not visit Phoenix Market Trends you may not have seen that we have published a few articles that may be of interest to our readers here at Arizona Apartment Investor.

With a lot of lender owned and short sale multifamily properties selling we put together some steps to help lease them since most will be vacant or you’ll make them vacant before repositioning.

1.  Filling A Vacant Income Property After The Purchase: How To Get The Income Flowing.

Property prices have dropped a lot for all property types.  Although rents have dropped as well they are still at levels which allow both multi-family and single family income properties to cash flow.  The article below reviews a good rental area where prices are very good as are the prospects.

2.  Phoenix Area Real Estate Investments That Cash Flow

This is an interesting read for the longer term and in real estate, investing is longer term so it would behoove you to know where the populations are moving, how and why.

3.  The Shifting Suburban Landscape And The Current Economic Crash

Bank owned properties are very attractive but not always.  We reviewed the market to see at what discount they are selling in proportion to list price and normals sales. 

4.  What To Offer On A Phoenix Bank Owned Home?

Homes are affordable now an many are very inexpensive at around $40.00 and sometimes less per square foot.  Often these are big homes with don’t make the best investments as rental income properties.

5.  $40.00 Per Square Foot Newer Phoenix Valley Homes: The Affordable Big.

This is just starting.  For about half a year now there were restrictions on how many loans an inventor could have and still buy properties.  If you had 4 or more you were out of luck, having to resort to expensive financing with made the investment not work, but now that number has grown to 10.  So investors can dive into this tremendous market filled with cash flow properties, good financing options and lots of potential for wealth building.

6.  Financing Up To 10 Properties Is Available Again.

Artur Ciesielski, (Certified Commercial Investment Member) 602.628.4349

Filed Under: From PMT, Investing in multifamily, Investment Financing, Management
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