Is 5.55% for a cash out refi way high??

46 Replies

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.

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. 

Originally posted by @Michael Bettencourt :

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?

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!"  

Originally posted by @Ned Carey :

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. 


5.5% is fine how much cheaper do you want ?

. If your deals are that tight ,then your buying wrong ! In the early 80’s it not uncommon to pay 15% interest on a house

@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.

@Michael Bettencourt

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%.  

@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.

@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.

Yes, that's high. Feel free to PM me for my lender he should be able to lend in your state. Lately rates non owner occupant have been in high 4's.

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.

@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.

@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.