Columnist: Take a look at the alternative

Published 12:00 am Thursday, September 3, 2015

Jerry Johnson

Contributing columnist

Your question: what is 2.5 percent?

You say not much? Guess again.

One of my investors tried a new loan at the lower rates that are wholesale at this time. Yes, he had about 10 rental houses and he went from all 30-year loans to all 15-year loans. His payments did not go up by cutting off 12–13 years off each loan.

The time he cut off the payments was $467,000 plus a few dollars.

Now do I have your attention? I talk to a lot of people that still have loans with 6.75 percent.

Let’s give an example. If you have a loan in the amount of $100,000 at 6.75 percent for 30 years, your payment would be $648.60.

Now let’s take the same $100,000 for 15 years at 3 percent. Your payments would be $690.59. Yes, your payments would go up $42 dollars, but you cut 15 years of debt away.

Take time to study your budget. You may be able to get out of debt much faster than you thought possible. Lastly, use a local banker or lender that you can drink coffee with and find out your options.

If you do this and save money I would love to hear your story.

“The free world must not prove itself worthy of its own past.” — Dwight D. Eisenhower

• • •

You’re wanting to get out of your rental?

I would suggest you go talk to a loan officer first.

Why? There is no pressure to spend money at that time. You are there to gain knowledge on what you can afford and to see if you need to pay off a car loan before you buy a house.

I hope when the loan officer pulls your credit you have paid your bills in a timely matter and your credit score is over 700 to get the best interest rate. If you owe some people that you did wrong, now is the time to go back and pay them to get your credit score up.

Sometimes we see someone with a $200 old phone bill they did not pay, but it cost them a good buy. Again, use a local lender. They will give you good advice and not charge you for giving you advice.

You’re looking for a long-term relationship because this may be your first of many homes to come.

More Than Enough!

“A pint of sweat will save a gallon of blood.” — Unknown

Jerry Johnson is president of First Realty of LaGrange.