Carrying A Note For A Relative?
I have a relative with a 318k first @ 8.25%fixed and a 79k second @ 10.99%variable
If I carry her first @ 8%fixed and her second @ 10%fixed she will save $110/month. Plus she will not have to worry any more about her rates going up. I can pull about 197k out of my home @ 5.5% and the other 200k out of one or two investments @ 6%(I think). This should cash flow about $600-$700 a month. Would this be a good idea? It will limit me investing in other rental properties in the near future. Plus I realize it’s not the greatest idea to mix business with family. I am making more than she is saving, but I am leveraging myself quite a bit to do it. Just curious what your thoughts and concerns would be?
Thanx
I totally agree with Jam. Also, 8.25% these days is EXTREMELY high. What this tells me is that she has a BAD credit. If not, she would be able to save more than $110.00 if she could refinance for around 5.5% or even a little lower by going 3/1 or 5/1 arm.
I wouldnt do it if I were you unless you are prepared to foreclose if she doesnt pay. Instead, I would help her address her credit issues and help her refinance at a much lower rate.
Maybe you should just give her $110 per month. This would avoid most of the concerns. Besides, tying up almost $400K to save $110 per month seems very excessive.
Stay local. I just went through this. After screwing around on the Net I eventually opened up the yellow pages and started calling credit unions and banks. They were all in the ballpark of what I was looking for. I ended up going through my own credit union, doing a re-fi and setting my heloc and for that they gave me 500 bucks for all of my business. Stay local. It worked for me and it may work for you.
Nate
credit unions and banks are only good if you have good credit. if you have decent credit, a broker can usually get you a better rate than a bank can. I know for major lenders such as Citi that brokers are offered better rates than their retail branches are (because their retail side is so strong and they are trying to strengthen their "wholesale"/broker side).
I am a mortgage broker. I have researched enough to find out that Chase wholesale is the easiest , fastest, good rates, and they can even do stated up to 100% at prime +.500. Also, they only require a drive by appraisal
Marnie,
Do you have any contact information for Chase Wholesale? I would be interested to know if they would do this in Massachusetts. A number or a state that they work out of would be great. From web searching all I am coming up with is Chase Manhattan.
Thanks,