7.125% interest rate on a conventional investor loan: When should I try to refi

Columbia, South Carolina
Private Lending & Conventional Mortgage Advice
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7.125% interest rate on a conventional investor loan: When should I try to refi

Connor Castillo
Member since 2019 · 34 posts · 18 votes

Hi all,

With this interest rate, when should I might try to refinance to lock in a lower rate. The home is in Columbia, SC. With the .5 point cut, I think the rates already dropped in anticipation of this happening, but not sure if anyone has further insight into this?

Thanks!

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Eric Veronica
Lender · Cleveland, OH · Member since 2011 · 588 posts · 439 votes
2y

Much of that depends on your loan size.  If your loan amount if 700k then a rate decrase of .50% - .625% often times makes sense.  

If you are looking at a loan amount of 100k then I wouldn't recommend refinancing unless you are shaving at LEAST a full percent off the loan and likely that wouldnt even be enough.  

Another big factor is which state the property is located.  Refinancing a home in Florida will typically cost 2x-4x more in fees than a property in Indiana.  

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  • Matthew CrivelliBusiness Member
    Lender · MA · Member since 2021 · 1k+ posts · 1k+ votes
    2y

    It's difficult trying to predict where the rates will go. Right now our rental loans are in the mid 6% range without a buydown. Floor rate is currently 5.25% with a large buydown. 

    [email protected]413-348-8346
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  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    2y
    Quote from @Connor Castillo:

    Hi all,

    With this interest rate, when should I might try to refinance to lock in a lower rate. The home is in Columbia, SC. With the .5 point cut, I think the rates already dropped in anticipation of this happening, but not sure if anyone has further insight into this?

    Thanks!


     From a rate perspective, likely is not close to making sense at the moment, would need rates to drop further, however if value has increased and you are looking for cash-out, that motivation (any lower rate as icing on the cake / secondary concern) it could make sense to look into

    [email protected]
    Harpoon Capital515 Reviews
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  • Eric Veronica
    Lender · Cleveland, OH · Member since 2011 · 588 posts · 439 votes
    2y

    Much of that depends on your loan size.  If your loan amount if 700k then a rate decrase of .50% - .625% often times makes sense.  

    If you are looking at a loan amount of 100k then I wouldn't recommend refinancing unless you are shaving at LEAST a full percent off the loan and likely that wouldnt even be enough.  

    Another big factor is which state the property is located.  Refinancing a home in Florida will typically cost 2x-4x more in fees than a property in Indiana.  

    2Reply
  • Andrew Zamboroski
    Lender · Member since 2021 · 498 posts · 131 votes
    2y
    Quote from @Connor Castillo:

    Hi all,

    With this interest rate, when should I might try to refinance to lock in a lower rate. The home is in Columbia, SC. With the .5 point cut, I think the rates already dropped in anticipation of this happening, but not sure if anyone has further insight into this?

    Thanks!

    Whenever to costs of a new mortgage are outweighed by a lower rate (assuming that is the only factor you’re considering) is a good basis.
    0Reply
  • Melvin ListBusiness Member
    Lender · Tampa, FL · Member since 2016 · 1k+ posts · 381 votes
    2y

    @Connor Castillo I would reach out to a broker that is willing to charge you a flat fee and find you the best rate on the rate sheet. Depending on serveral factors you could be in the high 5's.

    C2 Financial
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  • Ko KashiwagiPro Member
    Lender · Los Angeles, CA · Member since 2022 · 967 posts · 445 votes
    2y

    Hi Connor,

    At 7.125%, it probably wouldn't make much sense to refi now even if you can get in the mid 6's. It's really hard to say how rates swing in the short run, but the expectation is that rates will come down. Since I presume you don't have a PPP, it's likely a good option to refi as soon as the deal makes sense number wise, potentially in the high 5's.

    310-848-9776
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