What Interest Rates Are You Seeing?

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What Interest Rates Are You Seeing?

Dina Schmid
Member since 2024 · 107 posts · 55 votes

Curious if anyone has had any recent quotes on 30 year loans for an investment property.

I'm looking at something this weekend in Kentucky. Excellent credit and a 30% downpayment. My credit union quoted me 6.375% but they won't finance a log home. The in-state lender recommended by my realtor quoted me 7.0% if I paid $1300 towards points, which to me seemed ridiculous; back in April when we put an offer down on a property in Indiana we were quoted 7.0 without points. I'm trying to figure out which of these is the anomaly.

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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
2y

Don't pay for points since you can refi later.

4 to 6 rate cuts coming by end of 2025.

If it won't cash flow at a 7% mortgage then it's probably not a good deal anyway.

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  • Mike H.
    Rental Property Investor · Manteno, IL · Member since 2009 · 2k+ posts · 2k+ votes
    2y
    Quote from @Dina Schmid:
    Quote from @Mike H.:

    You are going to have an issue with it being a true log home.  A lot of lenders don't want to touch those.  Are you sure its a true log home and isn't just a stick built home with log siding and tongue and groove on the inside? 

    As for rate, it is an investment property so I don't know of anybody getting 6 or below on investment. But 6.5 should be doable.  Maybe 6.25 even. 


    The sellers have listed it as a log home. I've been questioning whether it's truly a log home myself and do suspect it's actually log siding. Earlier this morning I sent a message to my CU's mortgage loan officer asking if they would cover log siding. The response was that he doesn't know and would have to look into it and get back to me on Monday!  

     I would absolutely have the seller discloser whether its a true log cabin or if its just log siding. A true log cabin is absolutely going to limit the number of lenders you can use.  But log siding is absolutely not going to prevent any lender from financing a home.  You could buy a house with siding made of corn cobs if you'd like and they'd finance that (assuming the corn cob siding passed code).

    The issue is that true log cabins tend to significantly limit buyer pools because they are a bit of a niche product so lenders don't want to finance them at all due to the added risk for resale.  Very hard to comp.

    But log siding is just an aestethic difference.  The lender absolutely will not say to no financing a home with log siding.  Thats like a lender saying no to financing a house with blue siding because they don't like blue houses.....Just doesn't happen.  That lender will finance it with log siding as long as its stick built. Guaranteed.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    2y
    Quote from @Patricia Andriolo-Bull:
    Quote from @Jay Hinrichs:
    Quote from @Patricia Andriolo-Bull:

    Do you have access to a LOC in some way? I just got a 4.99% rate but it is a 3 year lock 30 year amortization or a 5.25% 1 year interest only. I'm likely taking the 1 year interest only and will refi then. My regular LOC is charging 7% today without points but it changes daily. I'm happy with a one year interest only commitment as I don't think the rates will get to there that quickly. BTW, this is with Morgan Stanley.


    is this loan secured by your primary residence as a HELOC  or are you borrowing against your stock/bond portfolio ?
    This one is borrowing against a stock portfolio but our Heloc just sent out a reduced rate also but still much higher than this. 

    ya I kind of figured that.. most folks on this site are probably still looking for those rates through a real secured vehicle an they dont exist.. But borrower on your stocks thats a smart play .. you just have to have enough of them to move the needle My  clients that do this get to borrower 50% and back in the day the rate was about 2%..  tie up 5 mil stock portfolio and pull out 2.5 mil at 2%  thats what I saw them doing then we would lend that money out at 15% or better.. nice delta..
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  • Patricia Andriolo-Bull
    Member since 2022 · 527 posts · 413 votes
    2y
    Quote from @Jay Hinrichs:
    Quote from @Patricia Andriolo-Bull:
    Quote from @Jay Hinrichs:
    Quote from @Patricia Andriolo-Bull:

    Do you have access to a LOC in some way? I just got a 4.99% rate but it is a 3 year lock 30 year amortization or a 5.25% 1 year interest only. I'm likely taking the 1 year interest only and will refi then. My regular LOC is charging 7% today without points but it changes daily. I'm happy with a one year interest only commitment as I don't think the rates will get to there that quickly. BTW, this is with Morgan Stanley.


    is this loan secured by your primary residence as a HELOC  or are you borrowing against your stock/bond portfolio ?
    This one is borrowing against a stock portfolio but our Heloc just sent out a reduced rate also but still much higher than this. 

    ya I kind of figured that.. most folks on this site are probably still looking for those rates through a real secured vehicle an they dont exist.. But borrower on your stocks thats a smart play .. you just have to have enough of them to move the needle My  clients that do this get to borrower 50% and back in the day the rate was about 2%..  tie up 5 mil stock portfolio and pull out 2.5 mil at 2%  thats what I saw them doing then we would lend that money out at 15% or better.. nice delta..
    It’s a nice delta all around. Keep the money in a market, hopefully doing better than the interest they are charging on a LOC, I get to deduct interest against my rental property bringing the effective rate down and they turn around and and make money on my $$. Win win!
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  • Mike GrudzienPro Member
    Lender · Eugene, OR · Member since 2019 · 2k+ posts · 1k+ votes
    2y

    Good job on doing your homework and research.  You found better rates.  How long did it take and how much did you save: calculate that on a per hour return!
    Mike

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  • John Whitfield
    Investor · Asheville, NC · Member since 2020 · 56 posts · 33 votes
    2y

    @Jonathan Greene

    I live in Black Mountain.  Curious what you're basing your numbers off of- I'm guessing the 2023 numbers are going to be a far more accurate prediction of future performance.  

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  • Jonathan GreeneBusiness Member
    Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
    2y
    Quote from @John Whitfield:

    @Jonathan Greene

    I live in Black Mountain.  Curious what you're basing your numbers off of- I'm guessing the 2023 numbers are going to be a far more accurate prediction of future performance.  


    How's the area after the storm?

    I have the data from 2022 and 2023 and the 2023 data was down because they split the lots to sell them all and the units were offline a lot. The 2022 data was over 50k and their per night rate was low. How much I make on it is not that important, if it's still there, because it's a usage play and long-term growth play. Their occupancy was limited to mostly weekends, but I think I can develop that more and recoup a lot of unused days. They weren't experienced operators.

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  • John Whitfield
    Investor · Asheville, NC · Member since 2020 · 56 posts · 33 votes
    2y

    Black Mountain, Swannanoa, and Asheville all got hit very hard.  Lots of structural damage, and the entire area is still without water and power for the most part.  Damage is on par with Katrina.  It's going to be a lot of work to restore and clean up.  Where is the property you were looking to buy?  Close to downtown or more in the mountains?

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  • Brooklyn McCarty
    Investor · Member since 2022 · 1k+ posts · 754 votes
    2y

    I would reach out to Brenna Carles with The Mortgage Shop, she is going to be the person who can help you the most with financing a log home. 

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  • Dina Schmid
    OP
    Member since 2024 · 107 posts · 55 votes
    2y
    Quote from @Brooklyn McCarty:

    I would reach out to Brenna Carles with The Mortgage Shop, she is going to be the person who can help you the most with financing a log home. 


    Went and saw it this weekend and confirmed it's log siding. Financing shouldn't be an issue.

    This hasn't been the only issue on listing information that's been incorrect/confusing. We don't think listing agent has even visited the property. No "for sale" sign posted out front to help find it. Told our agent that she's got four more showings today (a Monday?) when on speakerphone with me present. But then again, in that same conversation she mentioned the appeal of one-level living and the cabin being totally accessible - when there's a bunch of stairs between the street and the cabin!

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  • Dina Schmid
    OP
    Member since 2024 · 107 posts · 55 votes
    2y

    For anyone interested - We are under contract and have inspection scheduled for Wednesday for the cabin I mentioned. Unfortunately, due to all the turmoil in domestically and around the world, interest rates went up about 0.25%. Still doable though.

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  • Karina Busch
    Member since 2024 · 48 posts · 23 votes
    2y
    Quote from @Dina Schmid:

    We have a winner! I called local banks and found 6.125% with reasonable closing costs. I was honestly dreading doing the calling, but am so glad I did. 

    I have to give a shout out to @Michael Baum because I honestly would have never thought to call local banks directly when trying to get a house from OOS. 


     Congrats of being under contract and finding a better loan. I am in KY and have been quoted 6.5-8% on investment properties. Can I ask what bank you found for the 6.125%? That's great!

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  • Dina Schmid
    OP
    Member since 2024 · 107 posts · 55 votes
    2y
    Quote from @Karina Busch:
    Quote from @Dina Schmid:

    We have a winner! I called local banks and found 6.125% with reasonable closing costs. I was honestly dreading doing the calling, but am so glad I did. 

    I have to give a shout out to @Michael Baum because I honestly would have never thought to call local banks directly when trying to get a house from OOS. 


     Congrats of being under contract and finding a better loan. I am in KY and have been quoted 6.5-8% on investment properties. Can I ask what bank you found for the 6.125%? That's great!


    It's with South Central Bank. Or I should say "was" as the rate appears to have gone up a bit. 

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  • Karina Busch
    Member since 2024 · 48 posts · 23 votes
    2y
    Quote from @Dina Schmid:
    Quote from @Karina Busch:
    Quote from @Dina Schmid:

    We have a winner! I called local banks and found 6.125% with reasonable closing costs. I was honestly dreading doing the calling, but am so glad I did. 

    I have to give a shout out to @Michael Baum because I honestly would have never thought to call local banks directly when trying to get a house from OOS. 


     Congrats of being under contract and finding a better loan. I am in KY and have been quoted 6.5-8% on investment properties. Can I ask what bank you found for the 6.125%? That's great!


    It's with South Central Bank. Or I should say "was" as the rate appears to have gone up a bit. 


     Great, thanks! That's who I've had the best quotes from so far too. :) 

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