feodog
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Location: california
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I want to purchase a property, $50K. I would like to finance but can pay cash. Would it be best to purchase cash then do a Refi? Or get a loan? I would like to avoid PMI and limit loan charges. Any advice would be appreciated.
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Sun Jan 06, 2008 3:02 am |
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rockhound
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I think the "win-win" would be to take your existing $50,000 that you are willing to spend on the property, and invest it in something that is close to, or even beats the interest rate on a loan. Ideally, what you make on the $50,000 will negate the interest you pay on a $50,000 loan, and at the end of the loan term, you'll still have your $50,000 principal. I don't know what the rest of your financial situation is, and how getting a loan might affect your other finances. You would want to calculate with the actual loan interest rate, and if you have a lot of debt already, maybe another loan is not the best thing.
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Sun Jan 06, 2008 3:53 am |
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feodog
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Location: california
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Thanks for the response. I didn't do a good job of asking the quesion.
I would only pay cash to get the property then do a refi shortly after obtaining the property. I'm just not sure if it would be easier or benificial to get the loan now or purchase cash then refinance as soon as possible.
I want the $50K back for other opportunities and limit loan and PMI charges.
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Sun Jan 06, 2008 6:49 am |
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pf101
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Is this bare land or is it built on? I'm not a RE expert by any means but from what I understand, getting financing for bare land can be $$. I think you'll want to do a lot of math to figure out how much each option is going to cost you in fees/interest/etc vs. what you can realistically expect to make from having the cash on hand. Realistic being the key word in that sentence. 
Personal Finance 101
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Mon Jan 07, 2008 5:50 am |
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feodog
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Location: california
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Its a one bedroom home. It is leased for $650 a month through end of 2008 at this time. It should appraise for about $65K
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Mon Jan 07, 2008 4:02 pm |
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Apollo
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I would not pay for it in cash. Paying cash for anything of that size is a bad financial move. Get a loan and invest the cash that you have. If you pay cash you will safe interest payments but at the end of the day you will miss much more. YOur investments should yield you far more money then the interest payments that you will safe.
It is not smart to play it safe but it is safe to play it smart.
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Tue Jan 08, 2008 9:57 pm |
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bankruptcyandforeclosure
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What would be the point of doing a refi when you can just take out the initial loan? You'll be in a better spot anyway if you do the loan initially as you have 50k in the bank, otherwise you have 0 in the bank when you refi.
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Fri Feb 15, 2008 8:45 pm |
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cbass1017
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The point is that most home-buying or first mortgage loans have all kinds of closing costs. On the other hand most banks are willing to waive the closing costs on a refi. Some banks offer the ability to lock your interest rate in with a Home Equity Line of Credit. Most of these have no closing costs and that way you can take advantage of the declining interest rates and lock in when they come down a little more.
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Sat Feb 16, 2008 4:41 am |
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