Modification of My Construction Loan

Well I have my C/O so now I can modify my construction loan. I did a construction to perm loan, so now that the construction part is done its time to turn it into the perm loan.

I am going with a 5 year Fixed Rate mortgage, so it will go adjustable after 5 years. The initial interest rate is 7.5% which isn’t too bad considering I only put $5,000 down and this is an investment property. My payment is around $800.00 per month without taxes an insurance. It appears my taxes are going to remain based on the raw land for the next year, so I am going to save some money their. My insurance is around $90.00 per month, so at a total payment of around $950.00 I am going to have great POSITIVE CASH FLOW if i get tenants at the $1,200 per month I am looking for. Based on the rental market in my area I am pretty sure I can.

I didn’t have to bring any additional money to the modification, I just had to pay for my first year of homeowners insurance. So all in all I have around $6,000 of my cash tied up in this project and the rest of the funds came from the mortgage. I had to modify the loan amount upward to cover the stolen A/C unit, but i had plenty of equity so it wasn’t a problem. The modular home appraised considerably higher than what I paid for it!

The lender was great, the title company was great, I am now in my permanent mortgage with a fixed payment and rate for 5 years. Now its time to find a tenant!

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