Help with interest rate?
Hi! I just got preapproved from the lender today for my first rental property! I haven't bought a house since my primary residence in 2007, so this financing part is new to me. It seems like traditional lending is the cheapest way to go long term, at least at the beginning. I am putting 25% down and getting 7.731% 30 year fixed. This is with paying $2000 to buy down the rate. My credit score is 800, if that's relevant. The lender said that you pay an extra 1% for a non primary residence. Can anyone confirm this is true, and is this worth shopping or is this about the going rate at the moment?
@April Hamm, shop around. You've already gotten a lot of responses about lower interest rates available, and you should also really consider an ARM if you'd like a lower rate. Another thing to consider is potentially renting your existing home and buying a primary residence to take advantage of lower rates and even lower down payment amounts. That's what I'm doing. Over time I plan to do this again and again until I've built up a nice little portfolio. It's a slower process for sure but one that allows me keep more money upfront and also add some sweat equity. Hope this helps and good luck!
Quote from @Silvia Ochoa:
@April Hamm, shop around. You've already gotten a lot of responses about lower interest rates available, and you should also really consider an ARM if you'd like a lower rate. Another thing to consider is potentially renting your existing home and buying a primary residence to take advantage of lower rates and even lower down payment amounts. That's what I'm doing. Over time I plan to do this again and again until I've built up a nice little portfolio. It's a slower process for sure but one that allows me keep more money upfront and also add some sweat equity. Hope this helps and good luck!
Thanks for the input! I'm definitely starting to shop the rate and so glad I came here to ask! I'm already in touch with a couple of brokers from this chat and have already brought the payment down about 5%! Renting out the current house and moving is unfortunately not an option for me but is such a great idea for most people!
