Secrets of Buying Down Mortgage Interest Rates

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

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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