To see trends , variables were used over a wider range than would be likely to occur on Existing 1st Mortgages or Reduced Amortization Mortgages . To more readily comprehend the results , colors were used , ranging from green for the most attractive rates to dark orange for the least attractive rates ; and white for > 20 %, which was deemed to be unlikely to be considered as feasible . From this table , it is readily apparent that that the lower the interest rate , longer the amortization period and / or time until a balloon payment , and the longer the R AM term , the greater the benefits . Also , an inflation rate greater than 2 % should produce present value / breakeven rates , which are even lower ; and , therefore , even more attractive .
In the preparation of this worksheet and other information and documentation , upon which this table is based , assumptions are made , including those underlying the projections and how calculations are made , which may not coincide with the beliefs , choices , and selections of parties making use of this information ; and which information and documentation is inherently subject to economic and other uncertainties . Prior to and / or subsequent to the preparation of the Excel Worksheet for computations regarding a RAM Mortgage , tax rates and other information used therein may have already changed or may change in the future . There can be no assurance that the actual results will match any figures or projections provided herewith or contained in information subsequently provided . It is , therefore , critically important that the property owner have their CPA , or other qualified person , do an analysis incorporating the information that they believe is relevant and current ; and a decision to proceed with a Reduced Amortization Mortgage should be based on that analysis .
SUMMATION
Much of this material will probably be new and different . That is because it is ! But do not lose sight of the key question stated in the first section :
“ Will the investment of the annual tax savings ultimately result in more money than the amortization that has been sacrificed ?”
Think about it . Talk to your accountant or client about it . If you and / or your client and / or accountant would like to discuss Reduced Amortization Mortgages or a specific situation where it may be beneficial , contact me ( gk . enterprisefunding @ gmail . com ).
MEET GERALD KLUGMAN
Gerald Klugman has a background as a CPA , a Builder / Developer of Multi Family housing , managing a Public Warehousing and Warehouse Leasing operation , a nonresidential Real Estate Broker for more than 30 years ( specializing in Investment Real Estate ), an approved Arbitration Panelist for the Financial Industry Regulatory Authority ( FINRA ), and for a number of years has been active in the financial sector working to secure funding for major projects and ventures ( both real estate and nonreal estate ).
Reduced Amortization Mortgages were created by :
Enterprise Funding LLC GK . EnterpriseFunding @ gmail . com
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