What are the interest rates now a days for an investment property
What are the interest rates now a days for an investment property?
I got quoted a 4.12 the other day... is this a tad high or?
@Jon Abadia it does depend on your credit and DTI but yes the rates have gone up for investors and buyers for second homes the last few months. I've seen investors over 4%
@Joel Miller’s Those are some pretty good terms. Do you mind messaging me your lender information?
There are other factors beyond interest rate. Upfront fees and points can result in lower interest rate. Term affects interest rate, so 30 year will generally have higher rate than 15 year. Occupancy affects interest rate and down payment requirements. If you are putting 15% down on a duplex, you are owner occupying. An investor buying that same duplex for non-owner occupying will need 25% down payment. If the lender is issuing a conforming loan (Fannie / Freddie backed), they all follow the same underwriting rules. In other words, a bank can't write a conforming loan with down payment that is different than Fannie / Freddie requirements. If the loan is a commercial loan issued directly by the bank, it is not required to follow Fannie Mae or Freddie Mac underwriting requirements, but that also generally means higher interest rate and shorter lock in time for the rate.
Here are Freddie Mac LTV requirements:
http://www.freddiemac.com/sing...
Here are Fannie Mae LTV requirements:
https://singlefamily.fanniemae...
My point is don't just ask what the interest rate is. Ask all these questions:
1. Loan term (15 year, 30 year, is it fixed for the entire term or 20 year amortized with 5 year lock for example)
2. Is it owner occupied or investment (this changes rate and down payment requirements)
3. Number of units (single family and 2-4 have different requirements in some cases)
4. What are the upfront fees. Paying points will buy down the rate, but it is more money out of pocket.
If someone has not answered all these questions, you don't know if their rate would apply in your situation or not.
Originally posted by @John Tobin:
@Raymond Mehling would you mind messaging me your lenders info? My lender says the best he can do is 25% down because of fannie mae guidelines.
Your lender is correct, Fannie Mae requires 25% down for 2-4 investment properties. Only way to get lower is owner occupy.
Getting 3.375% with 1.279 points and 25% down for a 30 year conventional on a Baltimore rowhouse. Waived origination fees.
Closed about a month ago at 3.625%. Three unit residential mortgage, 25% down, no points, 30 year term.
@Raymond Mehling can you also please refer to me as well? I've been trying to find an 80% LTV lender for 1-4 multi-family. Thank you for any help
@Jingjing Yu can you please refer this lender to me?
Conforming loan: 3.75%, 30yr, 25% down, 1.875 pts.
In addition to the comments noted above by @Joe Splitrock, it's important to note that as of April 1 there were changes that significantly reduced the number of loans secured by second homes and investment property that Fannie/Freddie is permitted to purchase. This has affected rates, fees and LTV. Anyone quoting terms that were locked in prior to April 1, if its on a non-owner occupied purchase those terms are out of date. I closed a conforming 30-year cash-out refi on a 4-unit about a month ago at 3-5/8% and last week I was quoted 4.5%, 75% LTV for a purchase of a duplex from the same lender. I have a great relationship with the lender currently have 4 mortgages with them, 2 portfolio and 2 conforming.
@Jon Abadia I have a 14 unit under contract and have 3 approvals from commercial lenders
#1 - 4.25%, 20 yr, 20% down
#2 - 4.35%, 20 yr, 25% down, 5 yr readjust - 5 yr treasury plus 3.5%
#3 - 4.5%, 20 yr, 25% down, 5 yr readjust - 5 yr treasury plus 3.25%
@Jon Abadia closed on a duplex in Feb with 3.375%, 20% down
@Holly Smith
Who let you do 20%?
The only thing I'm seeing is 25%
@Jon Abadia about to close one SFH next week. 3.5% no points, 25% down 30 year fixed.
@Jon Abadia just closed today on 2.875% 30yr money. 25% down on side by side duplex. No points.!!
I am assuming that the 30 year fixed is for owner occupied?
@Neel Brown 30 year fixed can be for investment, second or primary! Utilize it now while the rates are still low overall
We have 3.625% locked on a 30 year fixed with 25% down and 1 pt. on a 2 units property in Phoenix.
People who are posting the lower rates that are about to close, did you lock recently or weeks ago. That will make a difference right now.
@Jon Abadia
Just got quoted 3.5/30 years/ 25% down
@reggie Desir was that for an investment property?
Just locked 2.99% with .21 pts in TX
Originally posted by @Clint G.:Just locked 2.99% with .21 pts in TX
Hi Clint. who was your lender? Was this for an investment property? Terms?
@Jon Abadia yes for an investment property in Rhode Island
Originally posted by @Joe Splitrock:There are other factors beyond interest rate. Upfront fees and points can result in lower interest rate. Term affects interest rate, so 30 year will generally have higher rate than 15 year. Occupancy affects interest rate and down payment requirements. If you are putting 15% down on a duplex, you are owner occupying. An investor buying that same duplex for non-owner occupying will need 25% down payment. If the lender is issuing a conforming loan (Fannie / Freddie backed), they all follow the same underwriting rules. In other words, a bank can't write a conforming loan with down payment that is different than Fannie / Freddie requirements. If the loan is a commercial loan issued directly by the bank, it is not required to follow Fannie Mae or Freddie Mac underwriting requirements, but that also generally means higher interest rate and shorter lock in time for the rate.
Here are Freddie Mac LTV requirements:http://www.freddiemac.com/sing...
Here are Fannie Mae LTV requirements:
https://singlefamily.fanniemae...
My point is don't just ask what the interest rate is. Ask all these questions:
1. Loan term (15 year, 30 year, is it fixed for the entire term or 20 year amortized with 5 year lock for example)
2. Is it owner occupied or investment (this changes rate and down payment requirements)
3. Number of units (single family and 2-4 have different requirements in some cases)
4. What are the upfront fees. Paying points will buy down the rate, but it is more money out of pocket.
If someone has not answered all these questions, you don't know if their rate would apply in your situation or not.
So eloquently said, if I may I will refer people to your comment here for future reference.