Can I use my current interest rate rate for another property?

[Jeremy Clarke]

Hello Gurus, this question may sound a bit odd but I have to ask. Here's my situation. I own a couple of homes in Denver. Both are now rentals. For one of them, I'd like to sell it to purchase another house, as my primary residence, in Denver in an area of town that i's prefer to live in. I currently have a loan on that property for 4.5% with a mortgagor. I know that my interest rate is tied to this house, but does anyone know if a lender would consider letting me sell that house and transfer the rate to a new address? Right now with my situation, I'd be looking at purchasing with an interest rate of 9.3% and that's just crazy. Appreciate direct answer as well as other creative solutions.

[Eliott Elias]

This is not possible. A 9% interest-rate seems high.

[Chris Seveney]

@Jeremy Clarke

That is not going to happen. The rate is based on rates at the current time along with your credit.

[Chris Davidson]

@Jeremy Clarke nope not going to happen it is not in the lenders interest to do that. You could wrap your current house which would allow you to collect on a higher rate, but a straight sale sounds like it would be better as you could drop your loan balance on the purchase. Did you live in the home for two years out of the last 5? If so you could avoid capital gains.

Best of luck!

[Ben Rhodin]

Hey @Jeremy Clarke! As already mentioned this would not be possible. However, your quoted interest rate is really high. Is this a DSCR product or a conventional loan? I could believe that interest rate if it was a DSCR loan, otherwise, find another lender. I've got investment loan rates for my buyers hovering around 7% currently, and if you buy a primary you can get even better. One way to get a better interest rate is to assume the current loan on the property you are buying.

[Robin Simon]

Quote from @Ben Rhodin:

Hey @Jeremy Clarke! As already mentioned this would not be possible. However, your quoted interest rate is really high. Is this a DSCR product or a conventional loan? I could believe that interest rate if it was a DSCR loan, otherwise, find another lender. I've got investment loan rates for my buyers hovering around 7% currently, and if you buy a primary you can get even better. One way to get a better interest rate is to assume the current loan on the property you are buying.

can't be a DSCR loan if its quoted for a primary residence

[Jeremy Clarke]

Quote from @Ben Rhodin:

Hey @Jeremy Clarke! As already mentioned this would not be possible. However, your quoted interest rate is really high. Is this a DSCR product or a conventional loan? I could believe that interest rate if it was a DSCR loan, otherwise, find another lender. I've got investment loan rates for my buyers hovering around 7% currently, and if you buy a primary you can get even better. One way to get a better interest rate is to assume the current loan on the property you are buying.

Hey Ben, thanks for the education! I'm going to check out a DSCR and see if that could be an option for me.

The reason why the rate he quoted me is so high is because my employment status. I am currently in between jobs so he said the rate is higher because it's a different product. I have great credit though. The plan has been, close on a property now and then refinance when rates get better and I find a job. Thoughts?

[Jeremy Clarke]

Quote from @Eliott Elias:

This is not possible. A 9% interest-rate seems high.

 Yeah, unfortunately i'm in between jobs so it's a higher rate. 

[Jeremy Clarke]

Quote from @Chris Davidson:

@Jeremy Clarke nope not going to happen it is not in the lenders interest to do that. You could wrap your current house which would allow you to collect on a higher rate, but a straight sale sounds like it would be better as you could drop your loan balance on the purchase. Did you live in the home for two years out of the last 5? If so you could avoid capital gains.

Best of luck!

 For sure! The plan is to sell. No i bought it as an investment property so i'll get hit.

[Jeremy Clarke]

Quote from @Ben Rhodin:

Hey @Jeremy Clarke! As already mentioned this would not be possible. However, your quoted interest rate is really high. Is this a DSCR product or a conventional loan? I could believe that interest rate if it was a DSCR loan, otherwise, find another lender. I've got investment loan rates for my buyers hovering around 7% currently, and if you buy a primary you can get even better. One way to get a better interest rate is to assume the current loan on the property you are buying.

 Also, what do you mean by "assume the current loan on the property you are buying"?

[Tim Bee]

Nope, unfortunately they don't allow you to swap your current loan rate.  It's pegged to the current property and locked in.  

[Ben Rhodin]

Quote from @Jeremy Clarke:

Quote from @Ben Rhodin:

Hey @Jeremy Clarke! As already mentioned this would not be possible. However, your quoted interest rate is really high. Is this a DSCR product or a conventional loan? I could believe that interest rate if it was a DSCR loan, otherwise, find another lender. I've got investment loan rates for my buyers hovering around 7% currently, and if you buy a primary you can get even better. One way to get a better interest rate is to assume the current loan on the property you are buying.

 Also, what do you mean by "assume the current loan on the property you are buying"?

 In short, you would take over the payments on the  current mortgage on the property you are buying. It can also be called "Subject to". and if you are selling the property as an investment, definitely think about 1031ing it as to avoid the capital gains taxes.