Andrew Ikeda 0 Report post Posted March 1, 2004 Greetings Fellow Investors, Just as a 'heads up', please be aware of internet lenders and some deceptions they are using. You will see ads saying something like: $300,000 loan amount for $800/month. Well, this could be the truth but I'm hard pressed to believe that. The lowest start rate that I know of is 1.25% and that amount increases 7.5% each year until you reach the fully indexed rate/interest rate! $300,000 loan amount/ 1.25% interest / 30 years = $999.16/month and that is assuming that this is one loan, which I seriously doubt it is. It is most likely 1.25% for 80% first loan and 15-20% second loan. The second loan might be from 6.75% on higher which in turn raises the monthly payments. Do you see what I'm getting at? Also, the low rates in the 4% range are not for 100% financing and there will be all kinds of qualifying issues for borrowers like you and I. Then there is going to be credit score issues, etc, etc, etc. Just beware and be cautious and question the heck out of everything these guys tell you. Please also report any funny stuff you find to us here on this website. (I'm not saying these guys are bad, just proceed with caution). Thank you and happy investing! Andrew Ikeda (Mortgage/Investment Specialist) US Funding Group, Inc 888-889-1640 ext 220 andrew.ikeda@usfundinggrp.com and/or andikeda@netscape.net Share this post Link to post Share on other sites
-Tony- 0 Report post Posted March 1, 2004 Greetings Fellow Investors, Just as a 'heads up', please be aware of internet lenders and some deceptions they are using. Andrew Ikeda (Mortgage/Investment Specialist) US Funding Group, Inc 888-889-1640 ext 220 andrew.ikeda@usfundinggrp.com and/or andikeda@netscape.net Hmmmm Share this post Link to post Share on other sites
MichaelC 160 Report post Posted March 1, 2004 Tony gets in his usual zinger.......... Andrew, thanks for the heads up. When in doubt, let common sense prevail. If it sounds too good to be true it probably is..........where there is money there are thieves........Buyer Beware.........etc.... Share this post Link to post Share on other sites
Andrew Ikeda 0 Report post Posted March 2, 2004 Yes, indeed Tony has got quite a zing! Has to have to be the whipper-snapper he is! Too much military? Was it Iraq? Share this post Link to post Share on other sites
-Tony- 0 Report post Posted March 2, 2004 No club Saudi Share this post Link to post Share on other sites
Andrew Ikeda 0 Report post Posted March 3, 2004 What's the difference? Share this post Link to post Share on other sites
Courtney Kostelecky 0 Report post Posted April 3, 2004 I teach a "Get Out of Debt" workshop, and the type of loan you mention $300,000 for only $800/mo is true. It is an INTERESST ONLY loan, usually for a period of 10 years, and then it converts into a regular fixed rate loan for typically 30 years. This is because people are monthly payment driven, and only focus on the low monthly payment. Courtney Kosteleckyhttp://www.DebtFreeNews.com Share this post Link to post Share on other sites
Andrew Ikeda 0 Report post Posted April 4, 2004 Courtney, Thanks for sharing the information with us. I know that there are a zillion lenders out there so maybe I just havent found out who that lender is yet. Not to pick bones with you but I did some calculations on my mortgage calculator and if you could get $800/month payments on a $300,000 loan amount, your interest rate would have to be under 3.25%. (A large majority of the lenders we work with require a .25% add on to the interest rate for the 'interest only' option). Ok, I agree that rates and terms like that exist out there however, I wonder who all can get that kind of loan? I know that there are some gimmicks or catch to the whole thing. I'm wondering what kind of credit scores a borrower would need. This sounds like a bank program and Washington Mutual, US Bank, and Bank of America are going to reserve these kind of rates for 700+ FICO scores. Besides that, banks are notorious for quoting these rates as 'teaser rates' to entice you to do business with them and when you go to closing, they will ask you to buy down the rate (which can cost $1,000 on up). Then I'm wondering about the LTV - is this really at 100% CLTV? My guess is that this is 80% on a first loan and your second loan (20%) would be at a 30 year fixed rate or you would have to have 20% equity or downpayment or you would have mortgage insurance. Perhaps you would be kind and open enough to fill us all in on who does these kind of loan programs? Yes, I agree that most borrowers these days are payment driven. But ignoring that for a brief moment, the interest only programs out there are great and can help a person build equity while keeping payments down low. Then in a couple or three years, a person can refinance with a lower LTV and into lower rates such as the banks offer. To me anyways, this makes a whole lot of sense. Thanks again Courtney for bringing this to our attention. Andrew Share this post Link to post Share on other sites
Courtney Kostelecky 0 Report post Posted April 4, 2004 the interest only programs out there are great and can help a person build equity No, you are missing the big picture. Interest only is INTEREST ONLY! There is no equity paydown. At the end of the term, you still owe the full amount. Most of the Interest only programs are for home equity loans. To find out more about my philosophy on debt and how to eliminate it, you can purchase the "Debt-Free and Prosperous Living" text book, available from me or pick up "Are You Being Seduced into DEBT?" by John Cummuta. Those are the books that I base my "Get Out of Debt " Workshops and consultations on. I don't have time to in this post, but one of the reasons I got into L/O is because I can help people. I can help them get into a home and work with them to get their DTI down so they can qualify for the home, and then once the home is purchased, I take them on as a client and show them how to automatically become debt-free including their new 30 year mortgage in as little at 5-7 years! Courtney Kosteleckyhttp://www.DebtFreeNews.com Share this post Link to post Share on other sites
Andrew Ikeda 0 Report post Posted April 5, 2004 Ok you are correct, however, most loans, if not all of them, you are paying down the interest anyways and I've been told it is longer than 10 years before a decent portion of the principle is paid down even on a 30 year fixed. The interest only payments help to build equity if there is appreciation factored in so yes, in a direct sense, no equity is built if there is no appreciation. However, we also know that borrowers can make an extra $100 plus every month in addition to their interest only payment to help pay down the principle, thus, they can pay off sooner than later. Of course, it will depend on how much extra is paid toward the principle and also timing it so that a borrower doesnt trigger any prepayment penalties. Thanks for the correction! Andrew Share this post Link to post Share on other sites
