Re: Lending rate question
This is really educational. Thanks all for the responses so far.
To answer some of the questions:
Immediately after selling my current home the HELOC will get paid off. The large HELOC serves as an immediate cash reserve for investments. (My brother does land development, and some investments we make require immediate cash. That's why we went with the 70% first mortgage.)
The 5% down is merely because coming up with that much cash without selling my house and without making a large paper deposit would be annoying. I would have to borrow it at prime through my business. It's psychological - just bothers the hell out of me to borrow from my business. If the price were right I could make it anything up to 25% down.
The 6% first is zero points, so about $2,300 to close including appraisal, lawyer, taxes, county and state fees, and mortgage borker vig, which is about $1,000. I can also get 5 and 5/8 for one point. I plan to pay that mortgage off in 5-7 years and then convert to a mega-HELOC for investment purposes. So when you say I can get the loan cheaper, how much cheaper?
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