Buying Down Mortgage Interest Rates for Real Estate Investors

09/15/23 • 47 min

Bend Real Estate Investing & Real Estate Financial Planning™ Podcast

There are several ways to improve cash flow on your rental properties. One option is to put more money down to reduce the amount you borrow. In some cases, this can also improve your interest rate by lowering your overall loan-to-value. However, when comparing putting more money down to buying down the mortgage interest rate, it is usually better to buy down the interest rate for any reasonable holding period. This is true from both a return on investment and improved cash flow perspective.

Learn more about buying down your interest rate in this mini-class.

Check out the video from this class here:

Buying Down Mortgage Interest Rates for Real Estate Investors - Video

In this class, James discusses:

Buying down mortgage interest rates when buying a rental property
Improving cash flow by buying down your rate
You can choose your interest rate by how much you're willing to pay or receive as a credit toward closing costs
Rate changes for the life of the loan
What's a point and how do they work?
What's par rate and why it is critically important to seek clarity from your lender when they quote you a rate?
What can you do with extra money when buying a rental property?
Comparing more down payment to buying down your interest rate
Requesting a buy down table from your lender (and what they look like)
Plugging numbers into the buy down spreadsheet
Looking at the cost difference when buying down your rates to various levels
Selecting where to buy down to
Simple and compound return on investment calculations done for you
Putting more down improves cash flow in 3 important ways
Comparing more down payment to buying down interest rates (not just cash flow... cash flow and equity)
Temporary solution to buying down rate or pre-paying PMI
Download the Mortgage Buy Down Spreadsheet
Plus much more...

Free Real Estate Deal Analysis Spreadsheet: Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis SpreadsheetTM by going to:

https://RealEstateFinancialPlanner.com/spreadsheet

Improve Cash Flow: Book a consultation to improve cash flow using our proprietary 88 cash flow improving strategies.

Real Estate Agent & Lender Collaborators: Interested in collaborating with us on the Bend real estate investor podcast? Book a free consultation to discuss.

Buying Down Mortgage Interest Rates for Real Estate Investors

Learn more about buying down your interest rate in this mini-class.

Check out the video from this class here:

Buying Down Mortgage Interest Rates for Real Estate Investors - Video

In this class, James discusses:

Buying down mortgage interest rates when buying a rental property
Improving cash flow by buying down your rate
You can choose your interest rate by how much you're willing to pay or receive as a credit toward closing costs
Rate changes for the life of the loan
What's a point and how do they work?
What's par rate and why it is critically important to seek clarity from your lender when they quote you a rate?
What can you do with extra money when buying a rental property?
Comparing more down payment to buying down your interest rate
Requesting a buy down table from your lender (and what they look like)
Plugging numbers into the buy down spreadsheet
Looking at the cost difference when buying down your rates to various levels
Selecting where to buy down to
Simple and compound return on investment calculations done for you
Putting more down improves cash flow in 3 important ways
Comparing more down payment to buying down interest rates (not just cash flow... cash flow and equity)
Temporary solution to buying down rate or pre-paying PMI
Download the Mortgage Buy Down Spreadsheet
Plus much more...

Free Real Estate Deal Analysis Spreadsheet: Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis SpreadsheetTM by going to:

https://RealEstateFinancialPlanner.com/spreadsheet

Improve Cash Flow: Book a consultation to improve cash flow using our proprietary 88 cash flow improving strategies.

Real Estate Agent & Lender Collaborators: Interested in collaborating with us on the Bend real estate investor podcast? Book a free consultation to discuss.

Previous Episode

Other Financing Options for Real Estate Investors

In the last several classes, we covered a variety of traditional financing options, including nothing-down financing, low down payment financing, conventional financing, and portfolio loans. These options represent the overwhelming majority of financing options used when purchasing properties.

However, there are a handful of financing options that are used infrequently, but it's still important to be aware of them. In this mini-class, we will discuss these other financing options, including private money, hard money, utilizing partners for financing, home equity lines of credit, owner financing, life insurance, self-directed retirement accounts, subject to and wrap financing, lease-options/lease-purchases, and foregoing financing to pay cash.

Check out the video from this class here:

Other Financing Options for Real Estate Investors - Video

In this class, James discusses:

Primary financing types that make up 90%+ of all loans
Creative financing: owner financing, wrap financing, lease-options/lease-purhcases, loan assumption, subject to, etc
Private financing
Hard money
Line of credit (HELOCs)
Buying properties for cash
Partnerships (utilizing all the other strategies)
Portfolio loans
Life insurance
Self-directed retirement accounts
Plus much more...

Free Real Estate Deal Analysis Spreadsheet: Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis SpreadsheetTM by going to:

https://RealEstateFinancialPlanner.com/spreadsheet

Improve Cash Flow: Book a consultation to improve cash flow using our proprietary 88 cash flow improving strategies.

Real Estate Agent & Lender Collaborators: Interested in collaborating with us on the Bend real estate investor podcast? Book a free consultation to discuss.

Next Episode

Loan Comparison Spreadsheet for Real Estate Investors

Sometimes it can be helpful to compare various loan programs and options simultaneously. For example, it could be useful to compare the monthly payment differences between various "nothing down," "low down," and full-size down payment options when buying a rental property.

Visually seeing a chart comparing the monthly payments of your choices of loans can assist you in making better decisions.

If you had a spreadsheet to easily compare a variety of loan programs at the same time, it would be even more helpful. In this mini-class, James will share with you a loan comparison spreadsheet that allows you to easily compare all of the most common traditional financing options for real estate investors.

Check out the video from this class here:

Loan Comparison Spreadsheet for Real Estate Investors - Video

In this class, James discusses:

Comparing various loan programs
Getting mortgage interest rates and private mortgage insurance from your lender
Optimizing cash flow by minimizing monthly loan expenses
Common loan differences between owner-occupant loans for investors utilizing NomadTM and House Hacker strategies
Common loan differences for non-owner-occupant loans
Download the Loan Comparison Spreadsheet
Plus much more...

Free Real Estate Deal Analysis Spreadsheet: Download a copy of the newest version of The World's Greatest Real Estate Deal Analysis SpreadsheetTM by going to:

https://RealEstateFinancialPlanner.com/spreadsheet

Improve Cash Flow: Book a consultation to improve cash flow using our proprietary 88 cash flow improving strategies.

Real Estate Agent & Lender Collaborators: Interested in collaborating with us on the Bend real estate investor podcast? Book a free consultation to discuss.