Investor · Highland Park, IL · Member since 2015 · 68 posts · 18 votes
Just today got quoted %5.55 for a %70 LVT for a cash out refinance on a 2 unit investment property in CA. Seems high being I just bought a duplex at %4.35. Thoughts?
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
6y
Why does everyone fret about a percent or so when money is dirt cheap historically. Someday you will be telling your children "you know i used to be able to get money at 5.5% and I thought that was too high!"
Accountant · Littlefield, AZ · Member since 2019 · 18 posts · 1 vote
6y
I've been getting about the same for investment properties, with a 725 points credit score, depends on location, if its multi-unit, and more. Seems it's difficult to get much better, for me anyway.
Investor · Highland Park, IL · Member since 2015 · 68 posts · 18 votes
6y
@Justin Farman crazy that’s the second quote around the same number. My credit score hovers around 800. I was surprised I was thinking it would be closer to the rate of an investment mortgage.
Real Estate Investor · Desoto, TX · Member since 2013 · 560 posts · 528 votes
6y
720-790 credit score from the 3 agencies, been seeing the same on refis (~5.5%). This is still cheap money. I simple assume this rate in my buying decision, when I am looking to hold long term. If I am refinancing an existing property I own, I also assume a similar rate.
Just today got quoted %5.55 for a %70 LVT for a cash out refinance on a 2 unit investment property in CA. Seems high being I just bought a duplex at %4.35. Thoughts?
What is the loan amount and your approximate fico?
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
6y
Why does everyone fret about a percent or so when money is dirt cheap historically. Someday you will be telling your children "you know i used to be able to get money at 5.5% and I thought that was too high!"
Why does everyone fret about a percent or so when money is dirt cheap historically. Someday you will be telling your children "you know i used to be able to get money at 5.5% and I thought that was too high!"
In my opinion rates will continue trending towards zero/negative. 5.5% is high. In the near future 0% will be the norm.
Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
6y
@Michael Bettencourt Assuming this a non-owner occupied, I think this is pretty standard!
From a historical point of view with interest at its highest level of about 18.35% in Sep 1981, this is a great deal when you take things into perspective and projected over the life of the loan.
Investor · Highland Park, IL · Member since 2015 · 68 posts · 18 votes
6y
@Dennis M. As cheap as I can. I was just uneducated and thought a cash refi rates would be closer to conventional. People always gripe and say to be thankful for the rates you are getting (which I am) but it would be dumb not to shop around. The difference between %4.75( the current rate on this property) and 5.55% is over $300 a month. There is more than one option for me to gain funds and finding the lowest rate is part of determining my best option. I’m sure most people would do a little research before assuming an additional $300 debt for the next 30 years.
In never hurts to get quotes from two or three lenders. Do a full application and have them send you a Loan Estimate. Also, it's not only about the rate. Sometimes there are points or lender origination charges built into the loan that obviously increase your costs. You may have lenders quote 4.875% but one of them is charging $1000 in total origination charges and the other is charging $5000.
With that said, most loans I'm originating these days on investment properties are around 5-5.5%.
Warsaw, IN · Member since 2017 · 229 posts · 270 votes
6y
@Rob Malda I agree with you. EU is almost entirely negative interest rates across the board.
I understand “interest rate risk”
Is something to consider for long term as investors, but don’t personally expect to see anything much higher than current rates for next 10-15 years, at least.
Rental Property Investor · Canton, OH · Member since 2017 · 1k+ posts · 1k+ votes
6y
@Michael Bettencourt
I'd get a few quotes, and if the numbers work for you pick one and move on. I've used portfolio loans, but they have ranged from 6.00% - 7.25% and 70%/65% LTV.
Accountant · Cleveland, OH · Member since 2019 · 3 posts · 0 votes
6y
@Michael Bettencourt
How many banks have you tried? I just had the option of a 4.75 for a cash out refinance or 5.65 AR for a HELOC. That was using local banks in the area and Huntington for the HELOC
San Diego, CA · Member since 2017 · 105 posts · 55 votes
6y
That does seem high. Usually the fact that it's investment property and you're doing a cash out refi can each add around 0.5 points to the interest rate. I'm going through the process now and the best I'm finding is around 4.6% through the Costco Home Finance program. Their closing costs are pretty low too, I'd recommend giving it a try if you're a member.
Real Estate Broker · Bradenton, FL · Member since 2017 · 544 posts · 363 votes
6y
@Michael Bettencourt
Is that a conventional loan or commercial?
I closed a commercial blanket loan at 5.75 this Summer. Seems like there should be a larger spread between commercial loans and conventional, but I’m not a banker.
Los Angeles, CA · Member since 2019 · 148 posts · 127 votes
6y
@Michael Bettencourt rates have inched up this week but that doesn't sound bad at all. They may go up or down next week but a few percentage points shouldn't make or break your decision. You did not mention how much the loan costs. I was at Chase only 4 hours ago getting quotes on a small cash out refi for one of my rental properties. Rates for the exact same loan amount were 5.625% for a loan with 0 points or 4.5% for 2.5 points. You can always find a cheaper rate if you pay higher origination fees but need to run your numbers and figure out which works best for your strategy.