Feel like I'm getting ripped off

8 Replies

I am currently purchasing an investment SFR in Los Angeles for 200K. I am putting down 20%. Why are the banks charging more than 5% interest as well as an origination fee and points? I never had a hard time with loans for owner occupied properties. I was under the impression that banks made it easy for landlords. I have even been told I should be putting down 25% but they were not going to adjust the rate. Is this how it works everywhere?

Welcome to the new world of lending. My father just purchased a SFR for 240K. 50% down & he got a rate of 5.25% with 2 pts.
His fico is 770+
Plus he had to provide heavy documentation too.

Yes heavy documentation for me too. Thanks for the reply. I really thought I was doing something wrong.

Those numbers sound about right. I've found one local credit union that is giving 5.0% fixed for 30 years on NOO. They loan 75% of appraised value with no points. Shop around a little but it's tough out there right now.

Matt, would you mind sharing the name of that lender?

Sure, but unfortunately they only lend within 60 miles of their main branch in Bellevue, Nebraska. It's SAC Federal Credit Union. I'm not in any way affiliated with them, just trying to indicate there is money out there. Try calling smaller banks and credit unions in your area to see if there is something similar. I talked to about 10 banks before I found these guys.

It sounds about right depending on your credit and asset reserves.
It always helps to check some lenders rates and go back to the original lender and tell them you were offered x rate at x points and see if they will do a reno and give you lower rates and points.

If you're getting 5.something% rates with 20% down, you're doing pretty well right now. I refi'ed a property a few months ago at 5.5%. I do think rates have dipped a bit more recently.

I was under the impression that banks made it easy for landlords.

Don't know where you heard that but I don't think that's true at all.

Hey Matt, thanks for the name of the bank. The other loans like these seem to be in other states as well.
Ophelia, I'm pretty sure the big bank will tell me to take my loan request to another bank.
John,assuming that landlords have documented income as well as rental history I thought banks would want to lend. I guess it was my own naivety.

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