Great content Miles. After the 3 or 5 year fixed term ends does it reset for another 3 or 5 year fixed at the current rate or does it adjust to a monthly adjustable for the remainder of the 30 yrs?
@MortgagesbyMiles
2 жыл бұрын
Excellent question - After the initial fixed period (3 or 5 years), the switches to monthly adjustable for the remainder of the loan. Please let me know if you have any other questions!!!
@juliansanchez3317
2 жыл бұрын
My lender offer me this loan as I have a duplex and are able to provide the extra cash flow. But she said my monthly payment would be Interest only. I am currently paying less interest monthly on my current loan and able to just throw the extra cash flow to the principal what am I missing shouldn't I stay with my current loan? It's the only benefit the fact you can have easy access to cash/equity? I want to try this all in one loan but are not convince.
@MortgagesbyMiles
2 жыл бұрын
Julian - thanks for the comment. There are a lot more details I would like to know about your situation in order to see if this would be a fit for you or not. One point I would make is that if we are comparing minimum interest payments on the aio vs traditional mortgage, the aio probably isn’t going to look great. However, the power of the aio is when a borrower puts their deposits (including rents, salary from their job, and other sources of income) into the aio to reduce their mortgage balance. Even though part of this deposit may be drawn to cover living expenses, it can accelerate the payoff of the loan, save thousands in mortgage interest, and give you liquidity/flexibility. This, of course, assumes a client isn’t over spending and is cash flow positive. I would be happy to do a call, email, or text to go into more details on your situation. The AIO is not for everyone, but in the right situations, it can be a fabulous financial tool. Miles@superiorlending.net or 385-250-1411.
@fl1431
2 жыл бұрын
In Canada, AIO for primary residence LTV is capped at 65%
@MortgagesbyMiles
2 жыл бұрын
Great info - I knew Canada had this loan option, but I never knew any details. Thank you.
@fl1431
2 жыл бұрын
if you search KZitem with Manulife One mortgage, you will see many videos from people like your channel providing details and pros and cons reviews. Btw, your explanation and review are awesome, one of the best videos on KZitem. I'd like to hear more details about how to utilize equity from this type of re-advanceable mortgage or HELOC to invest in rental property. Also, if you search Smith Maneuver on KZitem, you will see many videos of similar nature.
@anthonyrobinson973
Жыл бұрын
If I just purchased a PR 5 months ago with 20% DP, Are you still requiring a DP or will it be based on LTV. ex: purchase price 205K current OSB 163K. Closing costs is understandable.
@MortgagesbyMiles
Жыл бұрын
Downpayment would not be required. This would be a refinance and as long as you show 20+% equity in the home with the new appraisal, you'll be great. I hope that helps. Please feel free to reach out with any questions. TeamMiles@superiorlending.net or 385-250-1411
@chrisclark5128
Жыл бұрын
why is no one talking about the fact that your APR can balloon ? what am I missing here ? my lender recently offered this to me and I just don’t see the benefit compared to a fixed 15/30 year with extra payments. can someone please explain
@MortgagesbyMiles
Жыл бұрын
Chris - I'll do my best to answer, but sometimes a call works better in discussing these questions. #1 Interest rates rising: We do talk about the fact that the interest rate on these can rise up. The AIO is a variable rate (there are 3 and 5 year fixed options). In fact, rates have risen up quite a bit over the last year. I often remind my clients that the most important part of your mortgage is how much you pay in mortgage interest. Most of my clients that do the AIO will have it paid off in 3-6 years. There are also interest rate caps. I discuss with my clients before we do the loan, what a fully drawn, capped out interest rate AIO would look like so they know the worst case scenario. #2 What is the benefit over a traditional mortgage? Some of the benefits are: You have liquidity for up to 30 years. Most of my clients want to be able to reduce their mortgage with their idle cash and still have the ability to draw it back out (if needed). My clients love that this is simple interest and not amortized interest. If you make a deposit of $10,000, you immediately see you balance drop by $10,000. Every situation/client is different. This loan is not for everyone. I love that the simulator helps figure out if it makes sense. You can enter in your current 30 year mortgage (and show the extra principal payments) and compare it against the All-In-One. As I've shared before, I often have clients leaving their 2-3% rate 30 year mortgage to do the AIO. Thanks for the question/comment - I'm always happy to visit and discuss the AIO. TeamMiles@superiorlending.net or 385-250-1411
@brettelizabethspore
Жыл бұрын
Great video. Answered several questions others did not answer. Thank you for filming this.
@MortgagesbyMiles
Жыл бұрын
You're Welcome.
@h1398
Жыл бұрын
I am curious about the tax implications related to interest. Let's say that when you get an All in One your initial balance is 200k, you pay it down say 20k but then decide to use 75k of your credit limit for a car or maybe a down payment on a property. This means your balance is now 255k and you're paying more interest. At the end of the year when you get your mortgage interest statement can you write all the interest off or just the interest associated to the original 200k? In your case, when you paid the loan down to 0 and took on a new property can you write off the interest on the new home?
@MortgagesbyMiles
Жыл бұрын
Thank you for the question. You’ll receive a 1098 for total mortgage interest paid during the year. In short, first position mortgage interest may be deductible. Below is some info that hopefully answers your question. Is the mortgage interest paid still deductible? Mortgage interest paid towards the All In One Loan is eligible for deduction and a 1098 is issued to borrowers at the end of each calendar year. As outlined in Publication 936 of the U.S. IRS Tax Code, deduction eligibility is not defined by the type of loan you have on your home, but rather by the occupancy of the property and the use of the mortgage security (i.e. to buy, improve, etc.). Interest paid on home equity loans and line of credit is deductible if the borrowed funds are used to buy, build, or substantially improve the taxpayer’s home that secures the loan. The loan must be secured by the taxpayer’s main home (primary residence) or second home and meet all other requirements. Refer to Publication 936 ((www.irs.gov/pub/irs-pdf/p936.pdf)) and speak with a tax professional for advice.
@johnnyb79904
Жыл бұрын
So the interest you’re paying is on the HELOC rather than the mortgage…? Does that mean that it’s not deductible, even on a primary residence, unless the LOC is used to buy/build on the property? In other words, the interest is not deductible if I’m using it to pay regular living expenses?
@h1398
Жыл бұрын
@@johnnyb79904 I looked into this quite a bit. Most tax professionals really couldn't grasp the product and I didn't get confident answers. I also read the tax code and in my opinion it could be interpreted in a couple different ways. I called Northpointe since I have this product through their bank and they told me that they advise their clients to take the full deduction. I even explained the scenario of taking 30k out for a car but they still said it's treated as a first position loan so it should be deductible. Seems odd but I ran the scenario through TurboTax both ways and it was a difference of maybe $200 so I'm not going to sweat it. The fed isn't out to get me anyway
@johnnyb79904
Жыл бұрын
@@h1398 Hey, this is great. Thanks a lot. Good to see someone who knows their stuff on this product. I am also using Northpointe if I decide to go through with this. I'm a CPA but haven't dug deep on the interest yet. Most people take the standard deduction these days post-TCJA but it might make sense to itemize and use this since the interest is higher. I am still wondering if this product is worth it. Overcoming 2-3% between fixed and AOI is no small hurdle, especially when you have to commit to banking w them for 5-10 years or whatever the timeframe is. I'm not sure if it's more effective to just set aside $20-30k in savings into high yield, then sweep your available cash to principal on a fixed and refinance down the line. Still running numbers on this thing.
@h1398
Жыл бұрын
@@johnnyb79904 i can tell you it's worth it. I went in on Aug 2021 with the variable, who knew we'd be here right? Even so it's crushing my mortgage at a rate I would not have believed. I've paid over 100k down in 18months even with the insane rates. See it's not really about the rate, it's about paying the principal down in large chunks and keeping the balance low for as long as you can before bills come due. It's an insane product, can't wait for rates to drop, will be even better
@jeffabbott403
2 жыл бұрын
Can you use AIO to replace a construction loan on a new house ? assuming all criteria are met of course
@MortgagesbyMiles
2 жыл бұрын
Jeff - great question. The answer is yes. Absolutely.
@stevemazzilli4006
2 жыл бұрын
i believe you have to get the construction loan first and then switch to AIO after appraisal etc. i am looking at the same situation and have talked to CMG. We have an AIO on our primary. Love it. i am kicking myself for not locking in the 3-5 fixed though
@jeffabbott403
2 жыл бұрын
@@stevemazzilli4006 yeah I get the process. Our current home is paid for and we’re looking to build our empty nest dream home on some neighboring property we own and are wanting to get it paid off asap. How easily accessible are funds to handle your monthly expenses or do you just use a separate account?
@stevemazzilli4006
2 жыл бұрын
@@jeffabbott403 we run everything through the AIO. We use a CC and then pay everything off each month. Makes for easier bookkeeping. We are in same boat! have AIO on primary and bought a piece of property(used AIO check for DP) for retirement. i reached out to them to see if i can get another AIO on home. basically like i said CL and then turn it into AIO. You are in a good situation if house is paid for already. We got our AIO about 1.5 years ago. Wish i would have found it sooner.
@stevemazzilli4006
2 жыл бұрын
i figured we use the AIO to pay for the property(house) while we are still in primary(if your house is paid for like i said you are in good position. tons of Equity) we aren't quite there yet. now you will have payment(interest) in whatever you drew out. Assuming you move full time into retirement home and sell first house then you dump all the proceeds into the AIO that you were using for your home build/CL. Rambling sorry!
@domingodelvillar7222
2 жыл бұрын
Good morning Miles, thanks for the video. 1. What is the current interest rate for the AIO if fixed for 5 years for a candidate with 740+ score and that qualifies per the criteria? 2. What does the CT index stand for? Thanks
@MortgagesbyMiles
2 жыл бұрын
I'll make some assumptions on question #1 such as this is a primary residence. 6.630% for the month of July (APR 6.92). It will adjust again on Aug 1. Question #2 is the CMT or Constant Maturity Treasury. The One-Year Constant Maturity Treasury Rate (CMT) is the index used to set the interest rate. This index is a measure of yield from one-year treasury bonds recently auctioned by the U.S. Treasury and is has been a broadly used benchmark rate within the lending industry for decades. The One-Year Constant Maturity Treasury Rate (CMT) index is updated on the last business day of each month. The most recent available value published on the Board of Governors of the Federal Reserve System website (www.federalreserve.gov/releases/h15/) is used for the following month.
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