5.25% Interest rate on investment property

Private Lending & Conventional Mortgage Advice
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5.25% Interest rate on investment property

Wendy S.
Ellenwood, GA · Member since 2016 · 267 posts · 70 votes

Hi all.

Is 5.25% on a 30 yr conventional loan with 15% down and excellent credit, about where the market is right now on less than a $250,000 property or should I be shopping lenders, considering I'm using a broker.

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Nick C.
Investor · Tampa, FL · Member since 2011 · 2k+ posts · 3k+ votes
6y

If the property is in your name you can do better. If the property is in an LLC that's about the going rate.

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  • Clint G.
    Rental Property Investor · Corpus Christi, TX · Member since 2019 · 306 posts · 176 votes
    6y

    @Emily Powell

    I'll PM you. They are a smaller brokerage and only take new business as referrals.

    0Reply
  • Jeremiah GoodpasterPro Member
    Member since 2020 · 28 posts · 15 votes
    6y

    @Steven Griffith.

    No mine is a non-owner occupied home and at purchase was 20% down at 5% bought 1 point to 4.625% at refi they offered 75% LTV @ 5.25% or after 1 point 4.675% @ 30years. I have not seen anybody offer 3s for anything that wasn't a primary. Am sitting at 785 FICO.

    0Reply
  • Cameron TopePro Member
    Property Manager · Katy, TX · Member since 2015 · 1k+ posts · 1k+ votes
    6y
    Originally posted by @Cameron Tope:

    @David P. - Less than 5k on a 420k loan balance. It's from BP Federal Credit Union in Houston.

    @Jose Pena - Local credit unions with in-house loans. BP Federal Credit Union in Houston and Ohio University Credit Union in Athens, OH. I heard another investor getting a cash-out refinance Fannie/Freddie loan at 3.125%. @Jackie Morales

     See above. @emily powell

    [email protected]832-770-7090
    1Reply
  • Peter Baudendistel
    Rental Property Investor · Knoxville, TN · Member since 2018 · 36 posts · 36 votes
    6y

    @Jackie Morales. Single family, but ≤$100k where many lenders want to add points due to small loan amount.

    0Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    6y
    Originally posted by @Michael Aragon:

    @Joe Splitrock,

    Have you used that same lender with a live in property? Their closing cost for refi is nice so curious what their live in CC are. Thanks

     The closing costs shouldn't be much different for owner occupied with this lender. A little higher because it would have required a property survey. I should also note that this amount I mentioned for closing is only loan costs, so fees associated with writing the loan like, appraisal, origination fee, processing fees, underwriting fees, flood certs, title fees and title insurance. It doesn't include prepaids or escrow which is property taxes and property insurance.

    Loan fees are where most lenders make their money because most do not hold the loans. That is why you may get a decent rate, but get loaded with fees.

    1Reply
  • Jeff Shumway
    Lender · Tampa, FL · Member since 2020 · 182 posts · 90 votes
    6y

    Hi Wendy,  I am a direct lender .  It is very smart to get a few different quotes before you sign.  Rates and fees vary greatly between lenders.  While many can speak in generalities, I would recommend getting a loan estimate from a licensed lender so you have the rates and terms locked in before proceeding forward.

    I would love to help you out and get you an estimate and run some numbers to get you the best deal for your situation.  Please feel free to contact me to discuss. 

    0Reply
  • Wendy S.
    OP
    Ellenwood, GA · Member since 2016 · 267 posts · 70 votes
    6y

    @Caroline Gerardo

    Middle Fico 776, 20% down, pp was $200K but deal fell through. Btw, I was coapplying because my DTI is too high, would only qualify me for PITI of around $548.

    Now looking at pp $125K, and initial disclosure docs says 5.75. However, I'm thinking 5.75 is crazy so now looking to see what else is out there especially as I really don't want to coapply, then having to spend thousands to refinance six months later to remove coapplicant from title.

    Lender does not factor in new/potential rental income from investment property under consideration.

    0Reply
  • Tristin AllmondPro Member
    San Diego, CA · Member since 2019 · 1 post · 0 votes
    6y

    @Sean McCluskey could you send me a PM with the lender info? I just got an offer accepted and am looking to get loan estimates. Thank you!

    0Reply
  • Raymond J. RodriguesBusiness Member
    Lender · Miami, FL · Member since 2017 · 1k+ posts · 797 votes
    6y

    @Wendy S. how is the lender not factoring potential rental income? That seems off and so do those rates.

    [email protected]619-456-8311
    Helm Mortgage Corp.5126 Reviews
    WebsiteView Page
    0Reply
  • Wendy S.
    OP
    Ellenwood, GA · Member since 2016 · 267 posts · 70 votes
    6y

    @Rashaun Forrest

    I want to say a very big thank you. Closed on my loan today with a 30 year conventional loan at 3.625%. Your recommendation was spot on and our Loan officer was amazing. The best thing about it I was able to close in my name only, no coapplicant needed..... Now on to remodeling.

    0Reply
  • Rashaun ForrestPro Member
    Investor · Atlanta, GA · Member since 2020 · 54 posts · 20 votes
    6y

    Ask for Joe at j&r heating and air in Riverdale he will take care of you 

    0Reply
  • Wendy S.
    OP
    Ellenwood, GA · Member since 2016 · 267 posts · 70 votes
    6y

    @Rashaun Forrest

    Thanks

    0Reply
  • Matthew Ringer
    Portland, OR / SW Florida · Member since 2017 · 41 posts · 32 votes
    6y

    You should be able to do better. Very recently I've been quoted 3.25% on SFR w/ 25% down on a 30 year. Same quote on on 2-4 units at 3.75% buy down to 3.5%.

    0Reply
  • Wendy S.
    OP
    Ellenwood, GA · Member since 2016 · 267 posts · 70 votes
    6y

    @Matthew Ringer

    I closed yesterday at 3.625% with 20% down.

    0Reply
  • Matthew Ringer
    Portland, OR / SW Florida · Member since 2017 · 41 posts · 32 votes
    6y
    Originally posted by @Wendy S.:

    @Matthew Ringer

    I closed yesterday at 3.625% with 20% down.

     Good deal. Realized I was late to the party on this as soon as I hit submit on my response to you. Glad it all worked out.  

    Matt

    1Reply
  • Wendy S.
    OP
    Ellenwood, GA · Member since 2016 · 267 posts · 70 votes
    6y

    @Matthew Ringer

    Thanks

    0Reply
  • Ron Todd
    Rental Property Investor · OK · Member since 2019 · 126 posts · 114 votes
    6y

    In Oklahoma, my broker got me 2.999% at 25% down, no points on a 105k quadplex investment property.

    1Reply
  • Wayne Smith
    Rental Property Investor · Woodbridge, VA · Member since 2016 · 11 posts · 4 votes
    6y

    Interesting - I'm clearly doing something wrong or a lot has changed in 2 months. Purchased a SF 4/2 all cash couple of month's ago in Northern VA - We rented it out right away. High Credit Score / Reserves/ Solid tenants- It's been difficult finding a lender for a cash out refinance let alone to fair interest rate.

    1Reply
  • Shan Vincent
    Member since 2019 · 23 posts · 47 votes
    6y

    @Mitch Brunette

    Who was your lender?

    0Reply
  • Daniel Kong
    Rental Property Investor · Honolulu, HI · Member since 2018 · 335 posts · 251 votes
    6y

    If it's a conventional loan in your name, that's kind of high. I just closed on a 3.7% 30 year fixed a week ago, with no points needed to buy the rate down. 

    0Reply
  • William Chu
    Investor · Stockton, CA · Member since 2015 · 19 posts · 8 votes
    6y

    @Ron Todd how much you paid of closing cost all together ?

    0Reply
  • Ron Todd
    Rental Property Investor · OK · Member since 2019 · 126 posts · 114 votes
    6y

    Hey William, the cost sheet has it about 30k total to close.

    0Reply
  • Wendy S.
    OP
    Ellenwood, GA · Member since 2016 · 267 posts · 70 votes
    6y

    @ Daniel Kong. Not sure you missed where I said I used another lender and closed at 3.625% with 20% down. Paid $120 to keep the rate after I reduced the loan from $100K to $96,000.

    0Reply
  • Axel MeierhoeferPro Member
    Rental Property Investor · Escondido, CA · Member since 2017 · 684 posts · 550 votes
    6y

    Rates vary and shopping around for the best or a really good one is something anybody should do. I have not seen that you can get a deal with less than 20% down and no insurance. You should probably run a comparative calculation between the lower down payment and having to pay for insurance and paying a little more down and no insurance. I assume you are buying it for positive cash flow, so you could calculate how many months of cash flow it will take to repay the 5% difference and not having to pay insurance, which will result in that much more cash flow. Depending on the price fo the property, you might put that 5% on a short term credit instrument and repay it with positive cash flow from the property.

    One curious thing I like to ask: Is the property reasonably close to where you live? If so it could significantly improve your options.

    0Reply
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