ARE YOU OVERPAYING ON INTEREST?
by Alan Jones
What’s the single largest expense an apartment owner faces? It’s the interest to finance it!
It’s true! Not only is the interest more than taxes, insurance, operating expenses and maintenance – it is often more than all of these COMBINED! Those dollars could be going into your pocket!
- For every $100,000 of the loan balance outstanding, you can save about $1,000 per year for each % reduction in your interest rate.
- A $700,000 loan at 2% less would mean $14,000 per year in interest savings. That’s $70,000 in 5 years, $140,000 in 10 years.
- And on larger loans, the savings can be much, much more.
Three Factors That Affect Your Mortgage Rate
- Shorter loans, such as 20 or 15 year notes, can save you thousands of dollars in interest payments over the life of the loan.
- A larger down payment – greater than 20%- will give you the best possible rate. If you’ve got the cash now and want to lower your payments, you can pay on your loan to lower your interest payments.
- Credit quality and debt-to-income ratio affect the terms of your loan through FICO Score . If you have good credit and disposable income, you will get approved at a lower interest rate.
To learn more, visit our Financing Page or contact Alan Jones at 913-322-2780. Be sure to mention you heard about him through AAOA.
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