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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