Rate quote today : 5.125% for 30 year

Investor · Albuquerque, NM · Member since 2017 · 133 posts · 83 votes

What do you think of this rate? I'm wanted to jump on locking in a lender in case rates go up at the Fed meeting next week....

Property info: Duplex, $155k, 25% down

Rate quote: 30 yr fixed, 5.125% (no points), $1339 lender fee

Anyone seeing anything better?

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Russell BrazilBusiness Member

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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes

@Tandi H. Mortgage rates dont nessecarily move in step with the federal funds rate. There is a long term correlation but not a short term. About half the time mortgages react in the same manner, and about half the time they move in the opposite direction. The supply and demand in the mortgage market is a much more powerful short term influence on rates than what the Fed does.

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Jack B.
Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
7y
That seems like a great rate for NOO. I was paying 4.37% 5 years ago (at least for one deal) for OO.
0 Reply
Ryan Daniher
Real Estate Consultant · Short Hills, NJ · Member since 2016 · 55 posts · 28 votes
7y
Not bad at all. Seems great for an investment deal.
0 Reply
Amit P.
Las Vegas, NV · Member since 2018 · 49 posts · 40 votes
7y
@Tandi H.
I'm closing on 4 duplexes in the next 60 days and my rates are all at 5.5% (no points). Any chance I can get an intro to your lender? Thanks.
0 Reply
Dan H.Pro Member
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
7y
Originally posted by @Tandi H.:

@Jon A. Oh I see. My lender is allowing 25%. Do you use someone local or a national? All my mortgages are with AimLoan.com.
LTV on non-owner occupied duplex seems to be regularly at 75% LTV without paying significantly worse rates (just a couple years ago it was 80% LTV) but on a refi the LTV is typically 70% LTV or lower. I do not know the logic behind this but it is what I have experienced.
That 70% refi LTV is limiting to the BRRRR as it makes it real challenging to get out all of the costs (i.e. purchase costs and rehab costs). If I could refi at 80% LTV with decent rates it would be a lot easier to extract 100% of my capital using the BRRRR.
1 Reply
Jon A.
Asheville, NC · Member since 2017 · 385 posts · 274 votes
7y
@Dan H. From what I understand , your mortgage payments cannot exceed 70% of the rents collected either, so that could be another limiting factor on LTV on a cash out refi on a duplex.
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Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
7y
This got me to call my favorite direct lender about refinancing a free and clear single-family rental or 2.
She said 5.125% must be OO, for 30 or 15 yrs. The best we can do with a 70% LTV is 5.75%, more like 5.875%.
A portfolio 5/1 ARM would be 5% with a 1.5% fee.
If you can get 5.258% or less on a rental duplex with no buy-down, lock it up! My guess is you were misquoted as an owmer-occ.
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Maugno M.
Flipper / Landlord · Tyler, TX · Member since 2016 · 255 posts · 126 votes
7y
That's great. I'm on an ARM at 5/1
6.6% Interest.
#Ouch
1 Reply
Mayer M.
Investor · Cherry Hill, NJ · Member since 2016 · 860 posts · 324 votes
7y
@Tandi H. Where are you getting a 30yr fixed for non owner occupied? Is the property in an LLC? Is it a commercial loan? Thanks
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Dan H.Pro Member
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
7y
Originally posted by @Jon A.:

@Dan H. From what I understand , your mortgage payments cannot exceed 70% of the rents collected either, so that could be another limiting factor on LTV on a cash out refi on a duplex.
I have not experienced this on a non-commercial residential (i.e. 1 to 4 unit) refinance. I have seen this on commercial loans (5 or more units) on both the original as well as the refinance. It is one reason why 5+ units is tough to enter in my market because the cap rate often does not allow a 70% rent to value ratio.
The appraisal of the non commercial residential typically has a rent based value on the appraisal but the value used for the refinance is the comparable based value. On refinances, the comparable based value is typically conservative to very conservative. This irks me to no end. I can purchase a duplex in the same area and its appraisal comes in at or near the value I value the property but the refi that I am doing in the same general area comes in way below my value. A little more than a year ago I appealed an appraisal and got a $60K increase which was about 10% of value. You would think I would be happy. But the after appeal value was almost 10% lower than the value that I estimated (so original appraisal was ~20% lower than my estimated value).
My opinion is appraisals should be blind to offer price, type of financing, off market vs MLS. For non-commercial residential, it should be the current market value using the most appropriate comps (recent, physically near, similar property type, avoid the outliers (the lowest and highest sales)). What I see in refinance appraisals is the comps come from the lower half of the values often ignoring more appropriate (more similar) comps. My refinance appraisals are always below my purchase appraisals based on my estimated value.
So the refi limits to 70% LTV and then you get a conservative appraisal. I typically can extract only about 60% to 65% of my estimated value via the refinance which hinders extracting all capital via the BRRRR.
1 Reply
Tandi H.
OP
Investor · Albuquerque, NM · Member since 2017 · 133 posts · 83 votes
7y
@Amit P. @Steve Vaughan @Mayer M.
The rate I locked in today is 5.0%, on an investment duplex, not owner-occupied, 30-year fixed, with 25% down. New purchase not refi.
Rate was 5.125% without any points, I opted to put $500 in for 5% even. Seller is splitting closing costs with me 50/50 so they are actually helping pay some of my points : )
My contact:
Kelly Lewis- NMLS# 871080, Senior Loan Officer
Her email is Kelly at aimloan.com
3 Reply
Tandi H.
OP
Investor · Albuquerque, NM · Member since 2017 · 133 posts · 83 votes
7y
PS - Aimloan is a national company based in CA, so they can do loans everywhere.
0 Reply
Amy H.
Rental Property Investor · Richmond, VA · Member since 2017 · 295 posts · 229 votes
7y
@Tandi H. I closed with 5.6% in November so consider yourself lucky! Although, I definitely am going to negotiate a lot more with lender fees next time. I think I could’ve gotten a better deal.
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Neel Patel
Philadelphia, PA · Member since 2017 · 43 posts · 4 votes
7y
Originally posted by @Tandi H.:

@Amit P. @Steve Vaughan @Mayer M.
The rate I locked in today is 5.0%, on an investment duplex, not owner-occupied, 30-year fixed, with 25% down. New purchase not refi.
Rate was 5.125% without any points, I opted to put $500 in for 5% even. Seller is splitting closing costs with me 50/50 so they are actually helping pay some of my points : )
My contact:
Kelly Lewis- NMLS# 871080, Senior Loan Officer
Her email is Kelly at aimloan.com
Hi Tandi,
I gave them a call and was told they do not lend to LLC. Are you getting the loan or is an LLC getting the loan?
Thanks,
Neel
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Brian Pfaehler
Investor · Trafalgar, IN · Member since 2016 · 95 posts · 58 votes
7y
@Tandi H. Who is that with? I’d be interested in that....
0 Reply
Tandi H.
OP
Investor · Albuquerque, NM · Member since 2017 · 133 posts · 83 votes
7y
@Neel Patel I'm getting the loan, not an LLC. I know they don't do commercial loans either, just conventional residential.
1 Reply
Lony Dorce
Jacksonville, FL · Member since 2018 · 8 posts · 3 votes
7y
Awesome rate!
1 Reply
Matthew Mason
Rental Property Investor · Glens Falls, NY · Member since 2016 · 30 posts · 16 votes
7y
Hello all! If you are looking conventional Fannie Freddie check out the two matrix's below. local portfolio lenders will have different terms most likely. Also, If you are looking for a great LO reach out to @Jerry Padilla hes helped me with a couple buys and knows his stuff!
Cheers!
https://www.fanniemae.com/content/eligibility_info...
http://www.freddiemac.com/singlefamily/factsheets/...
1 Reply
Jerry Padilla
Lender · Rochester, NY · Member since 2014 · 3k+ posts · 1k+ votes
7y
@Matthew Mason Thank you for the mention!
@Tandi H. This pricing looks more along the lines of a primary residence versus investment. I would double check with your lender.
0 Reply
Santhi Mani
Rental Property Investor · Los Angeles, CA · Member since 2017 · 30 posts · 9 votes
7y
What would be rate for 20% down?
0 Reply
Tandi H.
OP
Investor · Albuquerque, NM · Member since 2017 · 133 posts · 83 votes
7y
@Jerry Padilla I know its hard to believe, somehow this company always gets a lower rate than anyone else. I've done four mortgages with them in the last 18 months, and each time they had the best rate when I checked around. I'm going to attach a photo of the rate lock sheet so you can see it for yourself!
@Santhi Mani I have no idea, you'd have to ask the lender.
Here's the rate lock sheet:
1 Reply
Aaron Hunt
All Over, USA · Member since 2017 · 689 posts · 756 votes
7y
What the fak I’m closing today and I have a 30 yr, 6.125% rate with 25% down, and a little over $3k in lender credits. If I wasn’t planning to accelerate payments and pay this thing off in like <5 yrs I’d be hella annoyed!
0 Reply
Christopher DerrPro Member
Investor · Garner, IA · Member since 2013 · 70 posts · 36 votes
7y
I wish, I was paying 5.5% on commercial 5 year ARMs with 25yr Amm and 1% cap. My lender just capped all 1-4 unit properties at 15yr amortizations. - Goodbye cashflow
Is this a commercial or a traditional. I'd love those rates on a 30yr loan!
Definitely looking for a new lender
0 Reply
Yavor Tomov
Rental Property Investor · Houston, TX · Member since 2013 · 79 posts · 20 votes
7y
Originally posted by @Tandi H.:

@Jerry Padilla I know its hard to believe, somehow this company always gets a lower rate than anyone else. I've done four mortgages with them in the last 18 months, and each time they had the best rate when I checked around. I'm going to attach a photo of the rate lock sheet so you can see it for yourself!
@Santhi Mani I have no idea, you'd have to ask the lender.
Here's the rate lock sheet:
Wow Nice!!! Will be calling them. I was supposed to close on a duplex and the best I could get was 5.5%. That was before the rate dropped abit. Still good find and thank you for sharing.
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Tandi H.
OP
Investor · Albuquerque, NM · Member since 2017 · 133 posts · 83 votes
7y
@Aaron Hunt Sounds like you are in good shape even with that rate, that's a quick pay down.
@Christopher Derr This is a traditional loan, not commercial.
@Yavor Tomov Great, contact Kelly Lewis at Aimloan, and please mention either me or Bigger Pockets! I would post her phone but they don't let you do that on this forum.
0 Reply
Nicholas Olson
Cushing, ME · Member since 2018 · 8 posts · 2 votes
7y
I locked in on Nov 19th for 5.375 30 yr fixed 25% down on a non owner occupied triplex with 2 points. I thought I was doing ok but I'll be checking out aim next time!
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