TT landlords already long put and call

来源: njrookie 于 2014-08-28 21:11:11 [] [旧帖] [给我悄悄话] 阅读数 : (507 bytes)
本帖于 2014-08-28 21:14:39 时间, 由普通用户 njrookie 编辑

most TT landlords already long put and long call in their levered RE investment. a mortgage has two built-in options:

1. a put that allows the borrower to walk away when price of the property drops ("put" depreciated property back to the bank);

2. a call that allows the borrower to cancel an expensive existing mortgage loan with high coupon and replace it with a low rate loan with same balance when interest rate drops.

just my 2c.

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