BiggerPockets

Craig,

Be very happy with what you have. It could always be worse right ?

Are you willing to personally guarantee the loan? Are you willing to collateralize against it with your own cash?

If so, you may be able to do a little better, though 10 year fixed is pretty great with those terms for non-OO (for example, I get a lower rate from my lender, but the term is nowhere near 10 years).

Originally posted by Craig Haynie

Also, when given those terms and interest rates, what would you choose and why? The frosted side of me wants to do a 3 year for the lower rate but the adult side of me wants to do a 5 or 7 year to give me more time to scout out the best long term deal. (10 points if you get the frosted reference).

What is it that you are trying to do with the loan? Are these loans for buy-and-holds, flips, development, or something else?

You may try checking out Amerisave.com too. They have a pretty slick system with a point/rate matrix for your loan scenario. I can find better loan product via my broker network, but the matrix gives me a good idea about where the market is when I am shopping for a new loan.

The Mortgage Professor also has conforming wholesale rates on his site so you can see roughly where the MBS investors are pricing their money daily. Small regional banks may tie their rates to prime and such instead.

Someone would really need to know more about what you are trying to do to say whether or not your rates are competitive. They don't look unreasonable to me using a cursory inspection, but the loan may not fit for your needs if you are holding long term.

Keep in mind that access TO bank money in this environment is almost a luxury and that you should try to develop a relationship with a small regional lender to keep your business humming long term.

I think the trouble you will have with conventional loans is that the collateral won't be adequate for the loans. If you are getting financing on investment property that isn't run-down then conforming loans will be your cheapest debt. The loan constants for the debt will likely be in the high 4% or low 5% range right now on a 30-year amortization. You can only finance a handful of property like this and you run out of Fannie/Freddie "bullets" and need to move on the other forms of financing that will be more expensive and on worse terms.

I am fairly certain Amerisave will let you input investor loan scenarios. The trick is that the property will have to be in good enough condition to get conforming loans on it.

The Mortgage Professor's site has a TON of information on it about all types of loan questions and topics. You could literally spend a month on the site reading everything. I go to the site frequently to see what wholesale conforming rates are so that I can add a standard yield spread to them to come up with what loans should cost.

If you are buying for cash and later refinancing you are going to run into seasoning issues and skeptical lenders. The skeptics won't want to count the improved value and will want to use the lesser of the appraised value or YOUR purchase price. This will be the case until the property "seasons" so that you can count the forced appreciation as equity in your LTV calculation for the refinance. Lenders differ on seasoning requirements so you will want to check around some.

When you refinance are you planning on holding the property in your portfolio indefinitely? If so, how much are you planning to finance? A frothy leverage level once refinanced will likely yield negative cash flow when you account for all costs.

Walk us through exactly what you are trying to do. You buy, rehab, rent, refinance and then repeat? If so, how much will be financed and how long will you hold the properties? How many of these do you plan to do at once? Will you hold all of the properties indefinitely or will you sell a portion of them and hold a portion?