Hi fellow investor pros, I am getting 5.125% interest rate for my first investment of about 300k loan from conventional bank which is quite high for me to get positive cash flow. Is there any advise of how to get lower interest rate ?
that seems high .. is this for a refi or a purchase ? is the property a SFR or multi family ..what is your credit score ? value / price of property ? are you paying any loan fee/ points for this rate? are you receiving any lender credit for this rate ?
one way to get the rate down is to pay more loan fee ( points) ..another idea is to consider an ARM loan program ( although these rates are likeely not much lower than 30 yr fixed rates
@Dave Skow this is SFR, 300k purchase and 20% down. 0.8 points. Fico 780.
Jay - thanks ...with these details - the pricing you outline looks fine / accurate ....if you want to get better pricing - try to put another 5% down ( 20K ) into the transaction and your pricing should improve quite a bit
@Dave Skow .I see. Thanks for the tip.
@Jay Patel Did you manage to get your IR lowered? I had the same experience offered by Movement.com:
Interest Rate is 5.25%, 30 Yr Fixed, No Points with a 5.346% APR. Closing Cost is almost $5301
250K Financing with 50K D/P. Total Fund to Close ($53K)
P+I Estimates of $1,105 plus taxes, insurance totalling $1614.
My Credit Score is in the high 700+.
With the current rate at mid 3%, i was really surprised to get the bumped of a rate. I was expecting a +1% but looks like they've put added risk to the offer.
This is a non-starter for me so i'm currently looking for a better rate (credit union, local banker, etc).
Appreciate any other suggestions.
@Pantaleon C. Nope. It was kind of deal breaker for me. I have not got better rate.bank agent mentioned jumbo rates are pretty good less then 3% but small investment loans were not less then 5%.
My first single family investment property was at 5.8% last November (when rates were a bit higher). I thought that was still quite high given my excellent credit and great business loan and primary home mortgage track record with the bank. But both the mortgage officer and my business banker (who also invests in real estate personally) explained that because it was my first investment property the bank considered it a bit riskier. Fast forward almost a year and I was just told by them that if I refinance now that I have a year in on that house and almost a year in on a commercial property that rate would probably drop to the low fours. Hope that helps a little.
@Tim Delaney Thanks Tim.
@Pantaleon C. You're welcome.