Best plan

[dkwan]

My friend is asking me her situation and I would like to ask everyone contributing their thoughts on the best possible scenario.

Details as follow:
Property 1:
Value: 500k
Mortgage 1: 147500@5.15% Nov 2009 renew
Mortgage 2: 72483@2.25 Nov 2009 renew
Property Tax: 5000
Utilities: 8000
Income: 26000 on rental
%rented: 75%

Property 2:
Value: 220k
Mortgage 1: 35827@1.45% 2013 renew
Mortgage 2: 61558@5.15% Nov 2009 renew
Property Tax: 2400
Utilties: 0
Income: 1350/month
%rented: 100%

Loan 1:
10000 @ 10.75% biweekly $380. Finished by Oct 2010
Loan 2:
6500 @ 3.25% biweekly $25. No end date

Personal income:
60000, take home biweekly $1550.

Possible mortgage renewal rate:
1) 5-year variable closed. Fully open after 3 years for P+0.35
2) 1-year fixed closed. 2.5%
3) 5-year fixed closed. 4.3%
4) Secured line of credit. P+1%

Constraints:
Car insurance: 200/month
Home insurance: 700/year/house
Food and entertainment: 1000/month
Gas: 300/month

Goal:
1) Maintain lifestyle
2) Least interest paid

What is the best scenario in your opinion. Feel free to discuss.
Will add more if you have any other question.

 

[sip]

haha, this more like a test. But I am also very interested to see everyone's opinion.

 

[Saint88]

Move all loan to mortgage,Renew all mortgage to variable.

 

[dkwan]

Yes, this secenario is quite interesting and a bit complex.

I would like to hear ideas from different member. Of course i would like to hear from host.

haha, this more like a test. But I am also very interested to see everyone's opinion.

 

[dkwan]

Move all loan to mortgage,Renew all mortgage to variable.

Which variable? 5-year variable closed? or secured line of credit?
Why? advantage? disadvantage?

 

[sip]

BTW, you can get 5-year fixed at 3.89% now.

Also, 3-year fixed closed. 3.4x%.

 

[dkwan]

BTW, you can get 5-year fixed at 3.89% now.

Also, 3-year fixed closed. 3.4x%.

Thank you.

 

[sip]

Just curious. Which home insurance company you are using?
It is very low for two properties.

 

[大锅饭]

1. Refinance your mortgage to pay out loan 1
2. your loan 2 looks like a secured line, you can keep it if you prefer the flexible repayment, or you can swith to a variable mortgage which is 0.65% less, or a fixed mortgage.
3. Renew all your mortgage to 5 yrs or 3 yrs fixed if you can get 3.89 or 3.4.
Another option is 1 yr fixed, because banks always offer good 1 yr rate, you can renew year by year. Even after one year, you want to go for variable, i wouldn't expect the variable will be more than P+0.35 at that time.

There is no best plan since uncertainty is always there.

 

[abcdef123456]

"Home insurance: 700/year/house"

My understanding is for one property so that it's not cheap.