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Old 09-28-2005, 11:04 AM
residential_lender
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Default RE: [IncomeProperties] Residential Loan Program

Well,
Your exactly right Crystal. The loan has what we call negative amortization. The interest builds on the back of the loan, increasing the actual principle of the loan. Sounds bad huh? Well, let me give you an example of when this isnt a bad loan.
1. Make sure you are in an increasing real estate market. We have all heard the stories of people who simply gave the keys to the house to the bank, because the "plant" shut down, and everyone was out of a job, moved on, and land became as cheap as dirt.

So lets consider you live in sunny Tampa Bay Florida. You are a fresh faced young woman who just finished her law degree up in Tallahasse, and you have gone to work for a law firm for whom you interned for a year already. They love you, you love them...sigh.
You go to buy a home. YOu and your boy friend will be buying the home together, because you are marrying soon, so it makes sense to purchase and not through the money down the renter rat whole.
Your first year as a lawyer the pay is 50,000 a year. Second year, you expect to be at 75,000.
Your boy friend, in the same boat.
Now, do you buy what a combined income of 100,000 can buy? or do you buy what a combined income of 150,000 can by.
In this example we have destined increasing income. You can suffer through the first year, and make the less than interest only payments, because the second year, becomes easy street.

Ok, how about this. you run a business. Cash flow is fine. Your business is selling crabs down on the pier, after buying them wholesale from the fisherman. Red tide happens. They say...ahh 3 months with no crabs...your loan allows you to pay less than interest only, so you do that for a few months to get over the time period w hen the business cash flow is less then perfect.
2 excellent examples of why this loan can work for people, who know how to work the loan.
It isnt for a retired couple, unless they just are chosing to live beyond their means, and wont care what happens to the estate!! Or if they are expecting large pay offs of cd's ect to mature, and they want a lower payment, and then make large "shot in the arm" type payments.
I hope this sheds a bit of light on how some of these 'creative' programs can actually be used in a successful way.
Bobbie Floerchinger
Super Mortgage
727-547-8776 office
727-235-3181 cell



Crystal Investment Property <crystalip@comcast.net> wrote:
This is a proposal given to my parents trying to solicit their business for
a re-fi in CA. I don't need a loan (and I know they re-fi'd in the fall so
they probably don't need a loan either) but I wasn't sure what was wrong
with the scenario they were given although it certainly sounded fishy. The
deferred interest part makes a lot of sense as the loan broker was quoting
$300k loan amount for $700 per month which over 30 years doesn't even pay
back principle let alone any interest.

Thanks for the feedback.

-----Original Message-----
From: Bobbie Skippadoddlealladaylong [mailto:batwanda@yahoo.com]
Sent: Wednesday, March 09, 2005 6:05 PM
To: IncomeProperties@yahoogroups.com
Subject: Re: [IncomeProperties] Residential Loan Program



Again, a 1% program exists...but it has many details.....
and I totally agree with Ron, but I would say to turn the caps off, they
hurt my eyes... anything that sounds too good to be true, generally is.
Bobbie Floerchinger Super Mortgage 727-547-8776 office 727-235-3181 cell




ronald tippitt <rnldtippitt@yahoo.com> wrote:
IF IT SOUNDS TOO GREAT TO BE TRUE, IT PROBABLY IS,,,,, WE CAN TRY TO GET
THE BEST POSSIBLE RATE FOR YOU, IF YOU CAN HANDLE
THAT????http://www.allsolutionsnetwork.com/cgi-bin/d.cgi/RT6649/no_down_loan
s.htm

Crystal Investment Property <crystalip@comcast.net> wrote:Anyone have
information/feedback on a residential loan program promising Jumbo sized
loans for re-fi's at a current rate of 1% interest over a 30 year term,
adjustable and tied to the bank's savings program rates?

Thanks - Michelle Kennedy


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