How to Slash Your 2023 Mortgage Interest Rate in Half: The Duplex Strategy
Mortgage Broker
Scott Gereaux Mortgage Broker
Published on September 1, 2023

How to Slash Your 2023 Mortgage Interest Rate in Half: The Duplex Strategy

The Magic of Duplexes

Ever stared at the sky, wishing for a magic wand to cut that daunting mortgage interest rate in half? The universe heard you! Introducing the duplex strategy using an FHA mortgage. Imagine owning a home, having a tenant, and potentially reducing your mortgage payments. Here’s the secret sauce:

Understanding FHA Mortgages

  • Simple Entry: FHA mortgages are government-backed loans, making it easier for first-time homebuyers to secure financing.
  • Low Down Payments: Typically, just 3.5% down is required.
  • Flexible Credit Scores: A bit of credit hiccup in the past? FHA can be more forgiving.

The Duplex Advantage

  1. Live and Earn: By residing in one unit and renting out the other, you stand to earn passive income. You’re not just a homeowner; you’re also a landlord!
  2. Shared Responsibilities: Utilities, maintenance, and some common costs can be split, reducing your monthly bills.
  3. Future Flexibility: The second unit can serve various purposes over time – think home office, space for extended family, or continued rental income.

Making the Numbers Work for You

Let’s illustrate with a simple scenario:

  • Mortgage Payment (Both Units): $2,000/month
  • Rental Income (One Unit): $1,000/month

With this setup, your tenant’s rent covers half your mortgage! Although your interest rate remains unchanged, your pocket feels the relief of only paying $1,000/month. It’s like effectively slashing your mortgage interest rate in half without the need for that magic wand!

The Bigger Picture: Building Wealth

  • Equity Growth: As you pay down your loan and property values rise, your equity in the home grows.
  • Tax Benefits: Potential deductions for property taxes, mortgage interest, and some property-related expenses.
  • Rental Increases: Over time, rent tends to increase, potentially covering even more than half your mortgage in the future.

Navigating Potential Pitfalls

All sunshine has a bit of rain. Here are a couple of things to consider:

  • Tenant Selection: Choose wisely. A reliable tenant can make this strategy smooth sailing.
  • Maintenance: As a landlord, you’ll be responsible for repairs and upkeep.

But don’t worry, with a well-drafted rental agreement and perhaps a bit of professional advice, you’re all set.

Ready to Dive In?

Intrigued by this smart real estate strategy? Ready to channel your inner real estate mogul and embrace the duplex advantage?

Give me a little more information about your goals or schedule a time on my calendar to discuss your house hacking goals. Together, let’s redefine homeownership for the next generation.

And hey, don’t keep this goldmine a secret! Share this article with friends looking to dip their toes in the real estate pool. After all, who doesn’t love a clever strategy to build wealth?

Mortgage Broker
Scott Gereaux Mortgage Broker
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(720) 775-7675