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Time value of money?
I am sorry, but that is a typical self serving response by people who do not wish to take responsibility and wish to push things off into the future, just look around you today and see how well that opinion has done for people. Only a person with short term goals and little to no foresight would favor an IO loan (either personal or corporate)... Suck up the few extra dollars, add some to it, pay it bi-weekly (regardless of what they say, you can do it)and amortize that debt paying less interest and on a shorter term... that’s value... not paying someone interest and receiving nothing in return...
You are going to pay about 5% interest only I assume? How much is that a year that you are paying to the bank without amortizing any of your debt? now, what could you do with that amount of extra money every year if you were debt free? roof deck, gym, amenities, reserves, lower maintenance, etc...
I apologize if I appear a bit opinionated about this subject, I am opposed to working against your financial stability nd freedom...
Best
~AR
And do consider a fully amortized, no ballon payment, loan. That is what we have in our building. It was setup before I bought but it was a nice feature. A fully amortized loand will increase shareholder value
Has anyone found any lenders offering refinancing of underlying mortgages (self-liquidating) under 5% APR for 20-30 years
Not sure what the current rate(s) are but can't believe underlyings are below 5%. Check out Josh Rhine @ Meridian Capital. Don't have the # with me but they are in lower Manahattan.
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I completely agree with AR. As president of a financially sound building, currently with no mortgage, we have a policy against IO loans for individual shareholders and our board would not consider an IO loan for the building if and when we need one.
At current interest rates, you are certainly going to be paying out more in interest than you will be receiving on your investments, so there is no time value to be found there.
Tell the board they should reconsider and rework that loan for one that amortizes...
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