Movable Mortgages
How it Works
The concept is simple - we allow our business members to take the existing Provident balance, existing rate, and remaining term of the loan on the apartment building you are selling and transfer it to the new apartment building you are buying. If you need more money on the acquisition than the current loan, we will add the additional funds at current market and provide a blended rate and term on the larger loan. By using our exclusive Movable Mortgage, you can increase your net revenue in many ways such as:
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Increasing your buying power
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Improving your cash flow
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Lowering your mortgage payments and improving your debt service coverage ratios
Movable Mortgages
With a Provident Movable Mortgage®, you can secure today’s low interest rate and take it with you when you decide to sell or do a 1031 exchange of your current apartment building. Our multi-family mortgage loans allow you to transfer your existing loan balance, low rate, and remaining term to your new replacement property.207
Movable Mortgage Examples*
Example 1: Increase your Buying Power
Purchase price is $2,000,000 and the rental income is $200,000 (using 45% expenses and 1.20:1 debt service ratio).
- At 4% you can get a new loan of $1,500,000
- At 5% you can get a new loan of $1,423,000
- At 6% you can get a new loan of $1,274,000
- At 7% you can get a new loan of $1,150,000
If your Movable® Mortgage is at 4% in a 7% market, you qualify for $1,500,000 rather than $1,150,000, an additional $350,000 in buying power.
Example 2: Improve your Cash Flow
Purchase price is $2,000,000 and 25% down for a new loan of $1,500,000.
- At 4% your monthly payment is $7,161
- At 5% your monthly payment is $8,052
- At 6% your monthly payment is $8,993
- At 7% your monthly payment is $9,979
If your Movable® Mortgage is at 4% in a 7% market your payment is $7,161 versus $9,979 which gives you an increased monthly cash flow of $2,818 which equals $33,816 in annual cash flow savings.
How can I take advantage of the Movable® Mortgage?
Simply contact the Mortgage Consultant that assisted you in obtaining your current Provident mortgage. You may also call us at (800) 632-4600, ext. 2703, ask for a Multi-Family Specialist and they can walk you through the entire process.
*All figures above are samples only and not an indication of the amount you will save.
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