Pacific Palisades Homeowners Consolidate Home Loans Achieving an Effective APR of 1.042%

A husband and wife who are both Hollywood executives had several loans on their Pacific Palisades home including a 5—year fixed that was coming up for adjustment. Unfortunately, the loans were interest only and were not paying down the principal. In addition, they had an equity line of credit with an interest rate ceiling of over 19%. The All-in-One Loan allowed them to incorporate $200,000 they had in a low performing CD and income from a rental property to establish a payment schedule that would pay off the principle in less than 6 years with an effective APR of 1.042% — saving them hundreds of thousands of dollars in interest.

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Compare the interest savings the All-in-One affords over current loans on this property.

The Effective Rate is the rate you would have to obtain with a 30-year fixed rate mortgage in order to pay the same amount of interest you achieve with the All-in-One Loan. The Breakeven Interest Rate is the rate you would have to average in order to pay the same amount of interest as the current liens on the property.

Remember, the maximum rate the All-in-One Loan can adjust during its 30-year term is 6% above the start rate — making this borrower's maximum rate 10.111%. Therefore, this borrower will come out ahead no matter where the interest rates move through the life of the All-in-One Loan.

This is the comparison loan data — it includes both lien types which comprise the client's current loan on the property.

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For any questions or to find out more, please don't hesitate to call us at 310-456-4494.