Lender fees on first investment property

[Steve Stepanian]

Hi BP!

After many years of learning and saving, I'm finally in a position to pursue my first rental property out of state within the next 1-2months and want to make sure I'm budgeting correctly and have enough reserves/extra cushioning so that there no surprised at the closing table. I'm working with one lender who was recommended to me by my realtor and noticed since it's an investment property there were quite a few points tacked on for certain things (see below). I understand that the rates are generally higher on investments vs primary but I was wondering if this was pretty standard to charge points on a number of things (see the quoted fees below):

• 20% down scenario:
  • 3.375% fees against the f loan amount
  • .75% if the loan amount is under 100,000
    .75% if the property is a condo
    .50 for any credit score 740 or higher
    
• 25% down scenario:
  • 25% Down
    2.127% of the loan amount
    .75% if the loan amount is under 100,000
    .75% if the property is a condo
    .25 for any credit score 740 or higher.

Is this pretty standard across the board with lenders to be charging a % against the loan amount and additional points for a smaller loan, condos, and higher credit score? 

Thanks!!

[Steven Foster Wilson]

@Steve Stepanian this is pretty steep on the lender prices. Ive seen this in HML but for a conventional loan its on the expensive side. If you can connect with some local credit unions or banks they'll usually charge anywhere from .75 - 1.5 points up front.

[Cassi Justiz]

Some lenders are great for owner occupants but totally not competitive for investment properties. The two lenders that I work the most regularly for investment properties will do 20% down and a flat origination fee under $1000 with no points.

Lending is very market specific, but that seems steep to me. I would definitely try to find some investment friendly lenders that are local to your market.