5.375% Interest for Conventional loan on Investment Property??
Hello All,
I'm in the process in buying a second home for the purpose of renting out. I plan on going with a conventional loan at 20% down, the loan officer I'm working with has me pre-qualified and has the interest rate at 5.375% (not locked in). I was told by him the only way to get the interest rate down would be to put down a bigger down payment.
Is 5.375% normal interest rate for an investment property?
Would there be any other way to bring it down, besides a bigger down payment?
I'm located in Virginia and my credit score averaged at 790.
Any help would be much appreciated!
Thanks!
Tom
I just locked in (last week) on SFR investment property in TN, 30yr fixed, 0 points, 80%LTV, @ 5.0%. I borrowed from same lender in early Dec (locked in Nov) for 4.75% My credit history is excellent. In both instances, I had other lenders that were offering .25% higher. Hope that comparison is helpful in evaluating your lending offers.
Love the detailed explanation on rates. Does it make a rate difference if you are doing a new purchase verses refinancing a property?
My first one a few years back was 5.125%, and I made a killing on the deal. If the numbers still work to point where it’s still a good deal, then write it off as the cost of doin business.
Originally posted by @Todd Willhoite:
Love the detailed explanation on rates. Does it make a rate difference if you are doing a new purchase verses refinancing a property?
On a rate/term refinance, your equity serves as your down payment. Meaning that someone putting 40% down on a purchase mortgage gets the same deal as someone with 40% equity doing a rate and term refinance. This is one of the reasons why most people, at some point, refinance.
Cash out refinances, however, have higher rates.
