Real Estate Investor · New York, NY · Member since 2014 · 81 posts · 46 votes
Hi BP Family,
So we're looking to buy our first out of state investment property in Indianapolis for 150k! Question is, going through a mortgage, they're claiming it is 3.5% with 2 points ($2,400) or 5%. Just asked another and it's the same. Is this really the best??
I closed on a property in Evansville IN couple weeks ago 3.5% and 25% down for a duplex. I have another under contract in Indianapolis and they just locked me in with the same rate. How much down payment are you putting down?
thanks for the responses everyone! speaking with a few lenders, surprising with a 790 credit score some claimed 3.5% with 2 points or 5% with no points.
however, the concensus is that a good rate for someone with high credit is 3.5% with no points at 25%-20%.
interestingly enough, we found a lender just searching top lenders on zillow and came across one that initially said they could only match the other lenders at 5% with no points, only to come back and say they "figure out a way" to get 3.5% with no points. concern that they will backload the cost onto the closing costs, but that is still better than the amortized total loan.
@Nick Sheveland congrats on the refi! makes sense that it's under 3%, rates will be better for primary, my focus is on the non-primary investment.
a lender from first federal reached out to me privately and seems like a good person to work with, but will still do my due diligence for another property.
@Sunny Suh seems like not very many people understand how interest rates vary significantly from person to person. YOUR particular interest rate will be based on a number of factors, including but not limited to:
type of property
state in which property is located
your credit score
your debt to income ratio
your down payment
the loan amount
plus many other factors
So just because someone else on bigger pockets got 3.25% does not mean that's what you'll get. Instead, simply recognize and appreciate that interest rates (in general) are at their lowest levels, and no matter where you go (credit union vs. bank) you'll have a relatively low interest rate.
but there is one certainty...if you use a commercial lender, like RCN Capital, you be forced to pay 2% - 3% more than if you use a residential lender. Plus, the closing costs are double, there's a pre-payment penalty, and the servicing companies that most commercial lender use are TERRIBLE.
a lender from first federal reached out to me privately and seems like a good person to work with, but will still do my due diligence for another property.
We have done some business with them and have had some clients that have in the past and they are always typically pretty solid with low fees from my experience.