We were thinking of putting an offer for a short term vacation condo in Maui Hawaii (~400k) but decided to not go forward with it because of high 3.75% interest rate for 30 yr Fixed, 20% down. We knew that STR's fall under non-warrantable loans but didn't expect the rate to be that high.
i have excellent credit score and can easily afford the unit. Does anyone have any suggestions? Are the non-warrantable rates this high only in Hawaii?
At these interest rate, STR's seem to be bad investment :(
That is still an excellent historically low rate. If you can't make money with that interest rate then this is not a good investment.
I agree with John. I would also say look into financing it as a vacation home/second home if you have plans to vacation there at least part of the year. Interest rates and down payments will be lower. However some lenders have guidelines on how much of the year you have to stay in it.
Yeah, as an investor in STRs here on Maui, that's a really good rate. You have to understand rates on investment properties are always higher than on primary residences. That's a pretty good rate. But if you are looking for lower rates, try calling some of the local credit unions. I've gotten good rates with some of them. Good luck!
Hey @Samer S. , Like everyone said, that is a great rate. I am not sure what you are looking for. The average mortgage rate across the USA is around 3%. That of course depends on a lot of things, but I just pulled rates from about 50 lenders.
The 3.75% sounds like a great deal to me.