I am about to invest in my first 2 bed 2 bathroom townhouse. My bank is offering me a 15 year loan with a balloon at end at 4.65%. Is this a good deal or would you rather go for a 30 year term?
The rate seems high. But what you’ve said they’re offering doesn’t really make sense or at least make it obvious.
If you mean they are offering a 15 year loan amortized as 30 years (so you still owe 2/3rds of the original amount (about $66,700)) in 15 years and have to find a new loan that’s a horrible deal.
What I am describing is lower risk to the bank so the rate should be less than a standard 30 year mortgage, not more.
Get a quote for a regular 15 year and 30 year mortgage and then compare it to a mortgage broker. Most banks are the worst place to look for loans, excepting MAYBE, some small local banks.
Yea I bet it is a 30 year amortization. On a non-owner occupied interest rate is very good. Just got to make sure you are in a position financially to either refi or pay off in 15 years.
Sorry should have clarified. It’s a 15 year loan amortized as 30 years for a non owner occupied 25% down mortgage.
For 4.65% you should be able to get a 30 year fixed with 25% down (way less risk for you if you still own it in 15 years). If you can afford it I’d go 15 year which should be 4.25% or less.
Yeah issue is I went with a credit union assuming they have lower rates. I didn’t realize they don’t do investment property for 30 years. Do most ppl go with bigger banks for a investment property?
I’ve used 2 local banks, a local credit union (twice). Bank of internet, and quicken loans. It doesn’t take 4 hours to search all of them for the best rate.
Great! Thank you. My loan officer said we don’t have a way to police who is occupying the property and we wouldn’t know if you didn’t implying I could do an owner occupied loan but I don’t plan on taking that risk.
No. Please don’t take that risk. That could entail federal pound sand prison time. Certainly it should for any banker telling you to do it after asking to sign saying you won’t. Doesn’t take a detective to find your drivers license or utility bill names, a lease, etc.