Homeowner · Del Rio, TX · Member since 2014 · 11 posts · 1 vote
completely new to this and would like to know if when you find a property that you'd like to finance. would you be financing the same as you would a regular home for yourself or is it a different type of loan because it is an investment property?
thank you...
Shawnee Mission, KS · Member since 2016 · 716 posts · 313 votes
8y
I just locked in to a 30-year conventional loan for an investment property. The rate is 4.75%, paid small point $ 350 to get this rate.
It has been long time since I have had a mortgage, it was work to provide documentation on everything under the sun. I guess this is the new reality of doing business since 2008 debacle.
Any one picked a note on single family home investment property, if so what rates did you get?
Shawnee Mission, KS · Member since 2016 · 716 posts · 313 votes
8y
The loans are different, investments loans are viewed as higher risk. That means rates are higher, insurance is higher, you must put down around 20% or more. The will scrub the app,they check everything you say twice.
Investor · Mission, KS · Member since 2016 · 42 posts · 22 votes
8y
There's so many different types of loans. FHA is owner occupied only so won't work for investments. VA would be for military personnel only. Best bet would probably be a fixed, 30 year conventional, that's basically the same for investments vs. home owner. Tons of info in the forums for this type question. Good luck.
Shawnee Mission, KS · Member since 2016 · 716 posts · 313 votes
8y
I just locked in to a 30-year conventional loan for an investment property. The rate is 4.75%, paid small point $ 350 to get this rate.
It has been long time since I have had a mortgage, it was work to provide documentation on everything under the sun. I guess this is the new reality of doing business since 2008 debacle.
Any one picked a note on single family home investment property, if so what rates did you get?
North Beach, MD · Member since 2016 · 13 posts · 3 votes
8y
Did you have to put 20% down on that loan? I am running in to the issue of the pricing in my area and the money needed down. Average price is 200-300k, requiring more than 40k down and I don't think its worth it at that point, unless I can fall in to the BRRRR requirements
Rental Property Investor · Golden, CO · Member since 2017 · 25 posts · 24 votes
8y
A few responses to questions raised thus far re conventional investment loans...
Yes, some lenders will let you use HELOC for downpayment on investment property.
As for rates, it varies on, among other things, amount of the loan and % of downpayment. 4.75% might not be bad on a 30 year fixed right now at certain loan amounts with 20% down. In Colorado on a $300k 30 year fixed you can get around 4.375% right now with 20% down. Rate improves with 25% down.
Would you still have to come up with 20% down with the brrrr method when you refi? Kind of, but not really. First of all, it’s often 25% down on a cash out. But that’s 25% of appraised value, and the hope is it appraises for more than you actually have in it. A simplified example: $300k purchase, with $40k in improvements, that then appraises for $400k, means you can take a cash out loan at $300k if 25% equity must be kept in it. You’ve got $40k in the house, which is a lot less than 25% actual cash down.
Rental Property Investor · Golden, CO · Member since 2017 · 25 posts · 24 votes
8y
@Billy Smith the lender who recently did at 30 yr fixed at 4.375% with 20% down charges a $995 underwriting fee on every loan, but there were no points or credits at that rate. Roughly $300k loan. Same rate on a recent cash out refi (75% loan to value) on a similar loan amount but with a $1,200 credit.
Lender · Denver, CO · Member since 2016 · 51 posts · 27 votes
8y
@Billy Smith The costs you are referencing stated by Bankrate.com are misleading to say the least. If you add up the costs show in the itemized breakdown of the "Itemized origination fees charged by the lender" and "Itemized third-party fees" it does not add up to roughly $2,000.
Itemized origination fees charged by the lender = $ 2,907
Itemized third-party fees = $1,464.
Total fees = $4,371.00
The total = $1,957.00 is the total of Origination Fees Charged by Lender = $903 (which doesn't add up to me) plus Third Party Fees = $1,055 (again doesn't add to me) ***I can't make sense of these two figures based on the itemized figures they have posted. ***
Shawnee Mission, KS · Member since 2016 · 716 posts · 313 votes
8y
Good point, my cost is around 2k that is all fees, but at closing I have to pay escrow i.e. insurance, taxes add 2k more that comes to around 4k at closing.