For rental property held free and clear with tenants in place, does anyone know if the following terms reasonable? • - interest rate of between 5.5% and 7% based on your credit score, loan to value, loan amount and the cash flow. • • - Maximum loan amount up to 75%. • - At 70% the loan would be as low as 5.75% on a 30 year fixed rate loan based on a minimum credit score of 740. Thanks in advance!

@Joel Hutchinson - That's reasonable for an asset based lender. I am doing a cash out refi right now 5.375% at 60% LTV. If I remember correctly it goes up to 6.5%+ at 75%. Similar ballpark. Credit >740. Mine is with Lending Home.

@Joel Hutchinson I just financed a rental property at 4.5% (75% LTV). Check out small local banks in your area, it’s worth the effort. Contact the commercial lending division at the bank. Typically the VP for commercial lending.

@Joel Hutchinson @Ryan Howell Those look like an asset-based loan (and the LendingHome one definitely is). Sometimes people call them commercial loans or non-QM loans. These days you can get down to 4.5% on the rate (with the average rate in the mid 5's) and up to 80% LTV on a fully fixed 30-year LLC loan. I think you can find something better.

If you're speaking with banks, you should speak with a mortgage broker. They can do all the heavy lifting for you. Unless you want to call the 5 smallest banks/credit unions around you.

5.5% min is pretty d*** high. Are all your quotes around there? Get some competing quotes if not.

OK! I will look into your suggestions. Thank You Kenneth Garrett and Nghi Le!

Thank You Ryan Howell and Scott Wolf! This is precisely the perspective and helpful suggestion I was hoping for.

Thank You Chris Mason, I’m attempting to figure out whether I should do a 1031 exchange or pull out some equity for reinvestment. The only bank I’ve questioned so far provided me with the above terms. Before asking 50 other banks, I was just hoping to find out if these rates are pretty close to the going rate or way off. Thank you for responding!

Updated almost 5 years ago on 12/13/2020. Most recent reply

58
Posts: 20
Votes

Joel HutchinsonPoster

Rental Property Investor
Glendale, CA

Private Lending & Conventional Mortgage Advice

Are these terms reasonable for borrowing against rental property?

Joel HutchinsonPoster

Rental Property Investor
Glendale, CA

Posted December 08, 2020 22:56

For rental property held free and clear with tenants in place, does anyone know if the following terms reasonable?

- interest rate of between 5.5% and 7% based on your credit score, loan to value, loan amount and the cash flow.
- Maximum loan amount up to 75%.
- At 70% the loan would be as low as 5.75% on a 30 year fixed rate loan based on a minimum credit score of 740.

Thanks in advance!

0 Votes

9 Replies

Jump to Last Reply

Most Popular Reply

9,937
Posts: 10,792
Votes

Chris Mason

Lender
California

Chris Mason

Lender
California

ModeratorReplied December 09, 2020 00:13

You wouldn't be asking the question if you could get a solid Fannie-type 30YF loan with a sexy rate, and I'm sure you're posting the best of what you could find rather than the worst, so yup that's of course reasonable, markets find equilibrium. Supply/demand and risk premium.

Chris Mason

2 Votes

Sort By:

Oldest

Loading replies...

Struggling to find reliable real estate advice?

Join over 3 million real estate investors to build connections, learn from others, and share your journey — all for free!

Your Profile Views

Curious to see who's interested in your profile? Unlock your views with Pro

Connect with others

7 day free trial. Cancel anytime.

PRO

Upgrade to Pro

Market Finder - key investor metrics for all US markets

Deal Finder - investor-focused filters and notifications for new properties

Calculators - Unlimited access to 9+ property analysis calculators

Find an Agent

Find & Match With an Investment Friendly Real Estate Agent

Enter your market to get started

Rent Estimator

Address or ZIP