We were just quoted a rate of 4.625% (5.125 APR) for a investment
property refinance with a cash out from the money store. the closing
costs are around 8% but the monthly P&I is very low, only $396!

Has anyone worked with The Money Store? Are they legitimate? Any
problems? ANY HELP AND/OR INSIGHTS GREATLY APPRECIATED!!

Thanks!

CORRECTED & DETAILED INQUIRY:

We were just quoted a rate of 4.625% (5.125 APR) for a $119K, 7/1 I.O.
ARM investment property refinance with a cash out from the money store.
the closing costs are around $8K but the monthly P&I is very low, only
$396! We need the cash flow, so are tempted by this low monthly
payment.

Has anyone worked with The Money Store? Are they legitimate? Any
problems? ANY HELP AND/OR INSIGHTS GREATLY APPRECIATED!!

wrote:
CORRECTED & DETAILED INQUIRY:

We were just quoted a rate of 4.625% (5.125 APR) for a $119K, 7/1 I.O.
ARM investment property refinance with a cash out from the money store.
the closing costs are around $8K but the monthly P&I is very low, only
$396! We need the cash flow, so are tempted by this low monthly
payment.

Having never refinanced, I have to ask. Isn't $8k about ten times the
normal cost for a refi?

Also if its an interest only loan, then the P&I isn't $396, the I is $396 and you
aren't making any principle payments at all. That is where a significant portion
of the monthly "savings" comes from.

If you really NEED the cash flow, then you really need it. Do what you need
to do. If you want to take the money just to leverage another investment
property, it is more risk than I would take.

On Thu, 16 Jun 2005 15:02:20 GMT, someone wrote:

Also if its an interest only loan, then the P&I isn't $396, the I is $396 and you
aren't making any principle payments at all...

On $119k and 4.625%, it doesn't even look to me that the $396/mo.
would even cover interest? Am I missing something here, or would some
part of the $8k in closing costs (6.72% of the loan!) be some kind of
buydown?

No, I doubt it is a "scam", I expect that all the terms are in your
paperwork. Just doesn't sound like much of a "deal" to me. But then,
if you NEED some cash now, and this is the only way you have of
getting it, well as the saying goes "desparate people do desparate
things".

Could you just sell the property instead?


Reply to NG only - this e.mail address goes to a kill file.

I am guessing you are not old hands at investment property financing.
Eight percent closing costs is very strange. The Money Store is one
step above loansharks, do a google search on both these terms together
-

"money store" "attorney general"

Common sense would indicate that the $396 / month payment is awry.
Five percent *simple* interest on $119,000 is about $500 a month.

I suggest you find a lawyer that deals in real estate stuff, and pay
them for an hour's time to look over the contract before you sign it.
Around here it's $125 or so (midwest US). Better that than possibly
getting screwed by your 'friends' at the Money Store. If the deal is
really great, your lawyer will point that out too and you will have
peace of mind at a low price.

You can find a lawyer here, for example:

http://lawyers.findlaw.com/