Going rates for conventional 30 mortgages for investors

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Going rates for conventional 30 mortgages for investors

Carlos Webel
Investor · Katy, TX · Member since 2013 · 37 posts · 7 votes

Hi all,

I'm selling a condo in Miami, FL and reinvesting the proceeds in several properties in Houston, TX. I'm doing a 1031 exchange so I'm time bounded on the identification of the replacement properties (45 days). I made couple of cash offers with enough time built in the closing date to try to get conventional mortgages in before closing so I can buy more properties with the cash proceeds from the sale of the condo. I'm working with a lender (mortgage broker) that confirms he can close on time. However, I was surprised when I saw the rates. Below the details of the financing on one the the properties:

- 3/2 SFR

- Purchase Price = 146k$

- Down payment = 36.5k$ (25%)

- Loan Amount = 109.5k$ (75% LTV)

- Loan Type = 30Y Fixed (Non-owner occupied / Investment) (Fanni mae loan)

- Interest Rate = 5.25% (No points upfront)

- APR= 5.435%

The loan will be on my personal name. This will be my 4th conventional loan, my credit score is 760+ (FICO) and my assets/liability and monthly income Vs expenses position is very strong. 

I was expecting the interests rate on this 30Y Fixed loan to be around 4.5% o less. Am I missing something major here or is this a very bad deal and I have to talk to a different mortgage broker?

Rgds, Carlos

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Stone Teran
Investor · Cincinnati, OH · Member since 2015 · 374 posts · 120 votes
10y
Originally posted by @Account Closed:

Chris M. Who said I'm putting 25% down? I clearly stated 80% LTV

 Which is <25%.

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  • Jim Carney
    Professional · Houston, TX · Member since 2016 · 24 posts · 4 votes
    10y

    Have you all ready selected a 1031 Exchange Accommodator? Also I have several bank contacts in Houston that might be able to assist.

    Jim

    0Reply
  • Jassem A.
    Investor · PA · Member since 2013 · 1k+ posts · 602 votes
    10y

    Try some other banks or local credit unions. I would also assume you could get a lower rate than that.

    0Reply
  • Account Closed
    Investor · Denver, CO · Member since 2016 · 736 posts · 582 votes
    10y
    My credit score is slightly higher than yours and I locked two weeks ago on a 30 year 80% LTV fixed rate loan at 4.875% no points at Wells Fargo here in Colorado. Anticipated close is middle of August (they're dragging their feet on the appraisal). Your estimate looks in-line with what I saw when shopping for a loan (credit union had lower rate with points...Quicken loans was lower rate with many points)
    0Reply
  • Chuck Webb
    Houston, TX · Member since 2011 · 115 posts · 70 votes
    10y

    I just got approved for 4.7% conventional. FICO score is 810 and I too thought it would be lower. Maybe the FED is sneaking the rates up on us in order not to scare the stock market.

    0Reply
  • Carlos Webel
    OP
    Investor · Katy, TX · Member since 2013 · 37 posts · 7 votes
    10y

    @Account Closed, I'm using Equicap1031, I talked to one guy there that seemed very knowledgeable and decided to go with them. They are charging 750$ for the sell and 250$ for each purchase. The only problem is that the guy I was dealing with just left the company so I'm now trying to manage an unexpected transition. 

    0Reply
  • Jim Carney
    Professional · Houston, TX · Member since 2016 · 24 posts · 4 votes
    10y

    I charge a flat fee for both of $990.00. You can change exchangers anytime before closing. I'm also available to meet if needed.

    1Reply
  • Alex J.
    Investor · Tarzana CA and Houston, TX · Member since 2015 · 326 posts · 130 votes
    10y

    I have a loan I recently got on a duplex 4.25%  fccu.org...I have 7 loans.  They are a credit union mainly in the southwest markets of hou

    0Reply
  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    10y

    @Account Closed - I don't do a lot of baby loans, but I still think you've got some shopping to do. North of 5%, I'd assume 15% down SFR and 660 FICO or similar. Or a big fat lender credit to help with closing costs.

    1Reply
  • Account Closed
    Investor · Denver, CO · Member since 2016 · 736 posts · 582 votes
    10y
    Chris M. Who said I'm putting 25% down? I clearly stated 80% LTV
    0Reply
  • Franklin Romine
    Visalia-Fresno, CA · Member since 2009 · 1k+ posts · 863 votes
    10y

    To me interest rates below 6% are cheap.  Roll with it. 1/2 % or so doesn't really matter much on small amounts of debt.

    The first few investor loans should be our largest pieces of debt, because it is the cheapest debt.  I got locked up with lenders after 5 traditional loans and had create a dozen portfolio loans with +6.5% interest.


    Frank

    1Reply
  • Stone Teran
    Investor · Cincinnati, OH · Member since 2015 · 374 posts · 120 votes
    10y
    Originally posted by @Account Closed:

    Chris M. Who said I'm putting 25% down? I clearly stated 80% LTV

     Which is <25%.

    3Reply
  • Igor Messano
    Philadelphia, PA · Member since 2015 · 177 posts · 64 votes
    10y

    Seems high to me as well. I closed on a similar property with 80% LTV with 4.375% from a local credit union. Closing was as fast as the title search here in Philadelphia allows it to be. My credit scores average to around 765.

    0Reply
  • Steven Loveless
    Real Estate Investor · Sachse, TX · Member since 2016 · 69 posts · 60 votes
    10y

    Best I've been quoted in the last month is ~4.4%, that is in the $150k-200k range with 20% down, 800+ credit, and high income to debt ratio. That was from a big bank, and it would be my first investment mortgate. It seems like most of the replies with lower rates are from local credit unions or smaller banks.

    Good luck!

    0Reply
  • Steven Woon
    Investor/Real Estate Agent · Allen, TX · Member since 2012 · 33 posts · 10 votes
    10y

    Last month, bought a four-unit multifamily for $300k+ with a 75% 30-year conventional mortgage.  My fixed term interest rate is 4.25% from BB&T.   FICO score similar to yours. You definitely need to shop around or negotiate with your lender.  Initially, BB&T quoted higher, but I threatened to go with my credit union which gave me the lower rate.  They finally relented.

    0Reply
  • Carlos Webel
    OP
    Investor · Katy, TX · Member since 2013 · 37 posts · 7 votes
    10y

    @Steven Loveless @Igor Messano @Alex J.@Chuck Webb Thanks for the feedback. I've shopped around since then and got some good contacts from different sources. It seems like the quick turnaround for closing had something to do with the offered rates. I found one lender that assures he can close in less than 3 weeks at 4.5% or lower (30Y fix). I'm moving ahead with him but I still have my concerns. I have a backup plan to pay all cash but that would significantly slow down my acquisition plan for the year. With the lenders you're dealing with, have you seen a correlation between turnaround time and interest rates? 

    0Reply
  • Alex J.
    Investor · Tarzana CA and Houston, TX · Member since 2015 · 326 posts · 130 votes
    10y

    they all take forever, theres no such thing as a lender that doesnt drop the ball i swear ive done 10+ deals and every one of them ive tried to find a better lender and they all suck and are never accountable...its always an excuse "oh my underwriter needs this, oh the appraisal never went out sorry, oh the appraisal is 3 weeks backed up, oh the underwriter is on vacation, oh man its all because of dodd frank and these dang compliance requirements back in the days it was soo much better"  its like they have a Rolodex of excuses everytime.

    I have all my papers and docs in place always and have the fastest turn around on any request but even then it takes forever

    no offense to anybody thats a lender, but i just feel like generally speaking they are not transparent and are in the business of nickle and dime-ing and are fairly dishonest about things possibly by design.  its prob likely because most transactions they do are with buyers that do like 1 purchase for their own personal home like every 5 to 10 years if not longer and feel they can rip people off and not have much accountability for it since the average buyer likely doesnt understand   what goes into the fees

    ok rant done sorry

    1Reply
  • Igor Messano
    Philadelphia, PA · Member since 2015 · 177 posts · 64 votes
    10y

    @Carlos Webel I have not seen much in correlation between the two. To me, most lenders can or can't close by a certain time period. I haven't experienced any premiums on expedited closing times. Matter of fact, in my case, the lender with best rates ended up being one of the few that could close in my time frame. 

    0Reply
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