Re: Payoff Mortgages Early? - Landlord Forum thread 359149

Re: Payoff Mortgages Early? by Garry on March 21, 2019 @22:01

Yes, you could if you wanted to. You could round up props A and B to the next $5 or $10 amount, and devote $100 to $150 per month towards your goal of getting rid of the PMI on prop C. However, I noticed you have 30 year amortization schedules on all 3 props. That means very little principal is being paid down for the first 15 years on each mortgage. Assuming you only paid 10% down, and assuming prop values increase at 2-4% each year in your area, it will still take you 5 years before you should even try to get another appraisal, even if you could afford to pay $200 per month ($2400 per year).

What I have been doing for the past 25 years, is when I buy a property, I get a 15 year, fixed rate mortgage, instead of the 30 year. BUT, it must be able to positive cash flow from day 1, or I don't buy it. I am 67 yo, currently have 20 SFH rentals, and 8 are totally paid for. My own home is also totally paid for. My recommendation is for you to only get 15 year ams on all future props, unless you have a LOT of extra cash to devote towards 30 year ams, to make them into 15 year ams.

Whatever you do, NEVER refi those super-low-interest props, as you will NEVER see those low rates in your lifetime again. When I was buying props in the mid eighties, the interest rates were 12-15%.

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Re: Payoff Mortgages Early? by Jason on March 22, 2019 @04:52	[ Reply ]

Thank you for responding. I went with the 30-year mortgages because I figured that I could always pay extra towards the principal, but that I might be spreading myself too thin for a 15-year mortgage, you know what I mean? Property A: Put down 3.5% (purchased Jan 2013) I have approximately $11k until the PMI can be removed. Property B: Put down 20% (purchased Nov 2016) Property C: Put down 20% (purchased Dec 2017) According to my calculations, if I pay an additional $200/mo towards the principal ($200/mo total for 3 props), they will all be paid off when I'm right around 54-years-old. Any advice for when I start looking for another property? Do you think obtaining a HELOC would be a good idea to use as a down payment since it'll have to be a Conventional loan.

Re: Payoff Mortgages Early? by Jason on March 22, 2019 @05:26	[ Reply ]

And don't worry - I will NEVER refinance Property C that has a fixed rate of 2.70%. Most brokers try to convince me to refinance to a Conventional loan so that I can purchase another property using FHA until they hear my interest rate - then they say to never refinance. I'll never see that rate again. Ever.