Mortgage Rate on investment condo

1 Reply

Originally posted by @Account Closed :

Hello all

I'm putting down 50% on 280k investment condo. What range of rate can I expect compare to 1st primary home?

>40% down is going to let you dodge the FICO/LTV hit if your FICO is >660, as well as the condo hit. Well done on that front.

Investment property is still going to be a 212.5 basis point hit.

Probably 0.5% to rate.

Here's Fannie's loan level pricing adjustment matrix: https://www.fanniemae.com/content/pricing/llpa-mat...

Most lenders will pass those costs directly on to you at-cost, before quoting you a "no points" interest rate ("no points" because we bumped your rate up high enough to eat those 212.5 basis points, standard practice in our industry). 

You can of course come in with the 212.5 basis points (2.125% of loan amount) to buy the rate back down to what an owner occupant would get. 45% down + 2.125% of loan amount will be ballpark the same out of pocket, but slightly better monthly cash flow. Would only make sense if you're going to hold onto this condo for a long time.