Was reading through the bonus chapter of `0-130..’ and learned that Steve McKnight prefers to have his portfolio on p&i repayment terms. I understand that for the most part investors prefer to have their loans on fixed term i/o to maximise cashflows. This is how I presently have things structured. Apart from this reason to have i/o loans on investment properties, is there any other advantage? Of those of you that have p&i loans on your investment properties what are your reasons for this? The chapter suggests that reducing debt lessens ones exposure to future interest rate increases, obviously. Would love to hear what others think.
Eric
Interest only loans are a great way to increase the cashflow…. of your mortgage broker. Their trailing commission is set at a percentage of the loan balance for the life of the loan. If a mortgage broker ‘advises’ you to take out IO over a PI loan they are:
a) Acting in their own interest.
b) Possibly breaching laws pertaining to financial advice.Yet it happens all too often.
Regards, F.[cowboy2]
so i take then foundation that your ip’s are p&i geared?
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