30 year loan on a investment home?

5 Replies

Hi,

I was told before if I purchase a home for a investment i can't apply for a mortgage loan. What's the boards thoughts on where to get a 30 year loan @4% for a investment home? 

Not sure where in Texas, but we have a number of members from there that can probably help.  I can tell you in Michigan we have no problems getting what you are looking for.

Joe Villeneuve

I haven't had much luck, but I am looking at properties in the sub $60k range which many banks don't want to deal with. The best loan I found was a 15 year amortized 5/1 ARM at 5.5% for a $40k loan. looking at the deal I decided to just pass and go the all cash route instead and have an offer in now on another property.

Ashish Mehta
I'm not sure what you heard exactly but you shouldn't have a problem getting a conventional loan on an investment property of you still only have two other properties. You just can't get an owner occupant loan for investment properties. An investment property loan through most big banks will require a 20% down payment and the taste will be a little higher then for owner occupants. I haven't found 4% but have seen 4.5%. Just stay calling around to different banks. Both large and small andhave them give you a quote. I hope that helps!

Originally posted by @Paul Ewing :

I haven't had much luck, but I am looking at properties in the sub $60k range which many banks don't want to deal with. The best loan I found was a 15 year amortized 5/1 ARM at 5.5% for a $40k loan. looking at the deal I decided to just pass and go the all cash route instead and have an offer in now on another property.

 Did you look into the loan as a REFI or purchase?  I found with many banks they wouldn't touch those 60k purchases, but if you buy them with cash, they would REFI them...some even with cash out options, with a short seasoning period...and at that 4 - 4.5% interest rate.

Joe Villeneuve
REcapSystem
A2REIC

As a lender I feel i should add my very worth 2 cents :) 
@Joe Villeneuve  is on target.  most banks dont bother with "low" amounts because there isnt enough money for them.  so try a mortgage broker or banker, especially one who wants business.

@Ashish Mehta LOL...who told you "if I purchase a home for a investment i can't apply for a mortgage loan?" because it's 100% totally and completely FALSE. I do investments loans all day long. HOWEVER, you will be required to put down 25% at a minimum. Furthermore, your rate is unique to you. just because so and so got 4.25% doesnt mean you're going to get it. your rate is affected by various items, such as your credit score, the down payment, the size of the loan, the property, loan purpose, etc. These days, you simply will not get a 4% investment loan unless it's an ARM, and everything is perfect.

I must add though, so many people get caught up in getting the lowest rates...which is wrong, wrong, wrong.   Having the lowest rate doesnt mean getting the lowest payment every time.  

check with an intelligent mortgage broker or banker and have them do a rate/payment/closing cost matrix.  most banks dont bother doing this because it's too time consuming, and they just want to give you a loan and move on.  

so, be careful when taxi drivers, hairdressers, dentists or other non-pros tell you something.  good for you to double check with this board.  there's a lot of bad info out there coming from ill-informed people that can hurt you.  

good luck

Patrick Britton, Real Estate Agent in WA (#120557)
360-927-0959

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Join the Largest Real Estate Investing Community

Basic membership is free, forever.