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Consider a 20-year fixed rate loan nowMarl Carter has been working with farm and ranch families for over 30 years in arranging long-term real estate loans for their operations. From his office located in Oklahoma City, he serves all of Oklahoma and the surrounding states. The majority of his clients are in Kansas, Texas, Arkansas and Missouri. Carter recommends the highest priority be placed upon obtaining a long-term fixed rate loan now while interest rates are at a record low. There are not many expenses that you can lock for 20 years but you can lock your interest. Current long-term interest rates range as low as 4 to 5 percent and perhaps lower on shorter term loans. Five-, 10-, 15- and 20-year loans are available. A savings of 2 percent on a $500,000 loan will save your operation $10,000 per year or $200,000 over a 20-year period. In reviewing financial data on loan applications, Carter says he sees too many applicants with variable rate interest that could be converted to a fixed rate. He also sees real estate mortgages with higher interest that will be maturing within the next few years. He strongly recommends these loans be refinanced now while rates are very low instead of waiting to the maturity dates. Also, it may be good business to consider converting short-term bank debt to a real estate loan to qualify for the lower fixed rate loans. One applicant he recently worked with had two or three smaller loans with short paybacks and only variable rates on his bank debt. The loans were combined together with part of his short-term bank debt in to one real estate loan at a much lower interest rate. The applicant's annual payment amount was reduced by 30 percent. The end result was a much lower fixed rate of interest, only one payment and one lender. The annual savings in his interest costs went directly to him to be used as operating money, debt reduction and other/or living expenses. Other applicants have applied for new loans with lower rates in their effort to arrange financing for their heirs. Many times the heirs are much younger and find it difficult to qualify for loans, but they can keep the inherited loan current and reap the benefits . The place to start in considering a new loan is to contact a knowledgeable individual that can analyze your particular operation and recommend the proper loan-type for you. In order to assist farm families, Carter's office hours are from 7 a.m. to 10 p.m. For more information, call 405-844-8787 or email carterml@sbcglobal.net. Date: 12/17/2012
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