What's my best lending option for this duplex?

Question

My offer just got accepted for a Duplex in Atlanta with a cap-rate of 8.5. I'm still relative new to REI and I'm not aware of the best options out there for financing a multi-family.

The property price is around $150k and I'm going for a 25% downpayment. So far I've spoken to only one lender and the best they offered was 6.25% for 30 year fixed without points. This seems quite high to me given that my credit score is 750+. Is this a fair rate? What are my options here. Please help! Thank you.

Thomas S. · Answer

Don't waste time going to banks, find a mortgage broker to locate you the best options. They will be in touch with all the same banks you would talk to on your own and do it in 1/10th time.

Sean Lambert · Answer

You could find a mortgage broker as well and see if they can find you a better rate.  You'll pay extra for the broker, but it will save having to knock on several bank doors.

Is seller financing an option?

J Torres · Answer

@Ankur Agarwal mine was a duplex as well so yes multi family investment property. Property was 305K so I could see a smaller loan being why but a full point higher? Got mine through chase and they price match any rate you are offered anywhere else in writing. Hope that helps.

J Torres · Answer

I'd keep calling banks. I just closed on a duplex in Las Vegas and my rate at 25% down for a 30yr conventional was 5.2%. Can't imagine that rates would vary that much state to state but don't quote me on that.

Ankur Agarwal · Answer

Thanks @Thomas S., @Sean Lambert. Do you have a preferred mortgage broker you could recommend? Thanks so much.

And no, seller financing is not an option.

Ankur Agarwal · Answer

I'm also being told that the rate given to me is on the higher side because

1) it's a multi family investment property

2) It's a smaller loan

@Jason Torres, was your loan along the same lines? If yes, do you mind recommending your lender please?

Craig Jeppesen · Answer

I work for a credit union and just checked today’s investment property mortgage rates. A 30 year rate with 25% down and a 1% orig fee is 5.625%. It is usually another 25-30 bpts if you don’t want to pay the orig fee.

What's my best lending option for this duplex?

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