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This is financial adviser, Patrick Munro, discussing what is discounting interest. Sometimes
in the area of mortgage financing, mortgage rates begin to take off and they get to more
of an unbearable area. That doesn't allow real estate deals to go forward. For instance,
if you are going to buy a rental house and you can only charge so much rent once you
got the house in your power, the interest that you pay on the mortgage, can only be
over a certain level. If the real time interest environment is a higher rate of interest,
you as an investor can take cash of your own money, give it in advance of the closing to
the bank and they will discount the rate of interest on the mortgage and bring it back
down to where it used to be. This will allow your deal to go forward and your deal to cash
flow to going forward once you acquired the property. This is Patrick Munro, discussing
the benefits of discounting interest.