@Mo Muigai keep in mind that the size of a loan makes a difference. If you finance $200k loan amount versus $75k loan amount your rate is higher for the lower amount. Does not seem fair but is reality.
Do owner occupied. You’re only required to stay on the property for one year. That one year you can do Airbnb.
Originally posted by @Mo Muigai :
Recently closed on residential with rate of 3.5%. I know investment properties run higher rates but is 5.75% a bit too high or that’s typical? This will be my first purchase of actual investment property.
Best I have been able to get lately on conventional SFR investment is 4.875% w/ 0 points. You can probably do better by going through a broker.
@Mo Muigai - please, please, PLEASE...shop around.
If you have a good credit score, reach out to some of the mortgage-specific banks, e.g. Greentree. They are typically more competitive with rates, easier to underwrite, less red tape, etc.
Banks like Citizens and Bank of America will execute mortgages for you, but they need their overhead from you so they can turn around and sell it to someone else. Big banks will always put their business overhead costs on everything. Its no different than buying something retail price at Best Buy, or using a big company for plumbing like Horizon -- you will pay for their "company costs" on top of everything else.
Also check in with any local credit unions if you can. They sometimes offer competitive rates with low/no fees to handle mortgage/refinancing. If you have a relationship with them already, they might be spectacularly competitive.
One final note, you said you were putting 20% down, I would assume to put down 25% (plus closing costs!), that is standard for investment properties.
Depends on a number of things, down payment amount, credit, and how many units? Around 5 to 5.25 I would say is within range but could be higher depending on the other factors. 25 percent is typical and will have those rates, 20 percent down at 5.75 would make sense since lenders price higher at that down payment level.
Too high ... Shop around...
Hey question for other investors...I've had my duplex for about 18 months -- 30 year conventional @ 5.625%, financing $77,150. Now down to about 75k.
Am I eligible for refinancing on an investment property? I'd love to get the payment down $50-60 a month. Add some CF back in my pocket, but don't know the rules.
I'm in the beginning of a BRRRR, financing purchase with cash and a HELOC on my primary for rehab; don't want to mess any of that up.
@Mo Muigai right now I have an offer for I think 5.125 on my investment property for cash out. But I also have one from a local in Georgia for a little over 3% which is conventional
I just locked in a loan for SFR investment property, 30 yr fixed, conventional, 25% down 4.18%
Commercial financing (aka not in your personal name) should be around 3.65-5% depending on quality of asset & location. Maybe past 5% for tertiary locations and/or small deals.