A client wanted to buy a house for $1,250,000. He had $250,000 for the down payment and some money to show reserves. His middle credit (FICO) score was 765. As a result, his reserves had to be for only 3 months. (For some–a FICO of 740 requires reserves of 6 months.) Though he had good income, he needed to have low monthly payments since he would be paying off student loans for the next three years.
The solution was to take a loan fixed for 3 years Interest Only (IO). After 3 years, the loan will amortize for 37 years to keep his monthly payments lower than the conventional loan.
Since there was no out of pocket closing costs to get this loan and no prepayment penalty, he could refinance his loan after 3 years.
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Date: Thursday: September 11, 2014 RSVP on Meetup.com OR Facebook OR email [email protected] |
