Chicago Real Estate Investing & Real Estate Financial Planning™ Podcast

Secrets of Buying Down Mortgage Interest Rates

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Learn the secrets of improving cash flow by buying down your mortgage interest rates on rental properties in Chicago.

This class is Module 34 of 46 in a series called Real Estate Investing Secrets.

Topics covered in this module include:

  • How improving cash flow by buying down your mortgage interest can help you get to financial independence faster and with less risk
  • One way of calculating the benefit of buying down your mortgage interest rate and a better, more sophisticated metric I’d probably use
  • We’re focusing on buying down mortgage interest rates when buying a property, but similar math could be applied when doing cash out refinances, cash in refinances, rate and term refinances or recasting a mortgage
  • The big picture: buying down mortgage rates and receiving credits for taking higher rates
  • How long does the mortgage buy down last
  • What’s a point and how to calculate them
  • Can I use credits to fund my down payment
  • What is par rate and how to get par rate when talking to lenders
  • Your options if you find yourself with extra money after your minimum total cost to acquire a property (down payment, reserves, closing costs, rent ready costs, cumulative negative cash flow/deferred down payment, etc)
  • Comparing putting more down versus buying down your mortgage interest rate
  • A sample mortgage buy down table from a lender and how to read it
  • Downloadable spreadsheet for analyzing mortgage buy downs
  • How to use the spreadsheet
  • What are vanity rates and how to deal with them
  • Using the spreadsheet to take advantage of market inefficiencies
  • Use the spreadsheet to automatically calculate simple and compound rates of return for various mortgage buy downs
  • Comparing the return in dollars for putting more down or buying down mortgage interest rates
  • Including improved equity growth in our comparisons
  • When you should not buy down your mortgage
  • How to determine if you should buy down your mortgage interest rate or pre-pay PMI instead
  • Plus much more...

    • Check out the video and additional resources related to Secrets of Buying Down Mortgage Interest Rates.


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    Chicago Real Estate Investing & Real Estate Financial Planning™ PodcastBy James Orr