interest rates for conventional loan

5 Replies

I just got prequalified today for a 100 k loan for my first investment property which will be a buy and hold single family home. This was through security national mortgage company, and not a typical bank. I have a credit score of 780

The lender didn't give me an exact rate quote but said that they were closing stuff around 5 1/8% and 5 3/4%. I see ads from banks quoting rates around 3.75-4%. Am I missing something? Why is there such a lare difference in the rates?

Not knowing what you're putting down or what the terms are, it's a little difficult to speak specifically to the rates you've quoted.

However, the lowest rates are generally reserved for owner occupied properties with insured mortgages.  You're getting a mortgage on an investment property.  That's probably an uninsured, conventional loan.

The rates you've been quoted are not bad rates at all for a non-owner occupied mortgage. It's a heck of a lot cheaper than HML money, but I would still encourage you to shop around, particularly with credit unions and smaller, local lenders.

@Hattie Dizmond  just nailed it.

Shop around you might be able to find better rates. They are historically low.

Hope it helps.

Rates in the high 3's are normally FHA or VA loans for primary residences. Also these loans can have higher built in fee's which make them less desirable.

That seems high for an investment loan on a single family. Have you tried smaller local banks and asked about break points for different amounts down?

sorry, the down payment would be 20% down

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