I am trying to shop for a loan to cash-out refinance my 4-unit investment property with a $1.1M traditional Fannie/Freddie loan and I'm in a "high cost" area (appraisal will be at ~$1.6M).
I just got quoted a crazy rate and am trying to reconcile. Can anyone help?
January 15th, I was quoted 3.125% with 2.7 pts.
March 15th, I was quoted 3.875% with 6.5 pts
I was finishing up renovations and had some delays which is why I couldn't refinance in Jan. Has anyone else seen this crazy hike? Any ideas of where I can find cheaper financing? I'm planning to hold long-term as a rental.
That's not crazy at all. Rates have actually gone up, as the Fed is trying to keep inflation at or above 2% right now. Fannie and Freddie were just told to LIMIT their loans:https://www.cnbc.com/2020/08/1...
You need to be watching them very closely. Make any move based on what they are predicting and saying. So inflation is actually what you want to see as a REI, since your fixed rate loan doesn't change, but rents do right? So maybe rerun your calculations based on that new rate, and then see if it is worth it for the cash out. From the looks of it, this won't be going down any time soon.
I'm not sure about current rates as I locked in my commercial rate at 3.5 no points mid January and closed mid February. However, I'd shop around quickly while I don't think additional pulls should affect your credit. You might want to check with a mortgage broker on BP about the validity of if it affects your credit or not, that was what I was told. That if you shopped around quickly in a week or so period it didn't.
They would never close that 3.875% interest rate with 6.5 points. It would trigger all kinds of high cost bells and whistles. Go with a DSCR loan. Rates have come down, ltv's have gone up and Fannie/Freddie are tightening on investor loans.