Monday, April 23, 2012

Apartments: Refinance on Not?


Is it time, or past time, to refinance the loans on your apartment buildings? Using programs offered through HUD, you should be able to get a loan with the following terms.

Interest Rate:
3.9%
Term:
35-years
Personal Guarantees:
None
Loan-To-Value:
80%

Does it sound too good to be true? It might be and in order to make the right decision you need to hire a professional who has expertise in present value analysis. Below is some information on a potential refinance.

Click To Enlarge
Assuming the above facts and the loan balance of the existing debt is $831,155.10 with a 1% Prepayment penalty, a due date in 82 months, an existing interest rate of 7.45% and the owner plans to sell in 60 months, should he refinance?

Send me your email address or Tweet it and I will send you the answer on Friday, April 27th

3 comments:

Leaderscorp - Mortgage Rates said...

Refinancing this one would be a better choice. The owner of this one will gain benefits since the current rate is low.

Dominic Duncan said...

I think at this point and time the apartment financing rates are quite lower since we are still recovering from economic declination we experienced last 2007. And yes, agree with you that refinancing the rates will somehow help the renters.

Vicki Tower said...

This has been my question since day one. I asked fha massachusetts about it, and they were in favor of this refinancing.