Interest rates on investment properties

Cornflakes

Cornflakes

Active member
The other thread on mortgage rate is dominated by PR borrowers and sometimes hard to compare notes.

Hopefully this thread will pick up steam and all landlords can exchange info on what rate they are paying, LTV, what refi/new purchase rates are available, lenders etc. for their investment properties.
 
Cornflakes said:
The other thread on mortgage rate is dominated by PR borrowers and sometimes hard to compare notes.

Hopefully this thread will pick up steam and all landlords can exchange info on what rate they are paying, LTV, what refi/new purchase rates are available, lenders etc. for their investment properties.
Click to expand...

One of my clients got a quote for 3.25% with 25% down with a conforming loan last week for a rental property in Orange County.
 
I just closed 2 weeks ago,went from 4.25 to 3.25% on an investment property, but I had to pay closing costs ($3k ish) 60% LTV

on a different note, anyone have any lendors that can do heloc on investment? big banks etc
 
SoclosetoIrvine said:
I just closed 2 weeks ago,went from 4.25 to 3.25% on an investment property, but I had to pay closing costs ($3k ish) 60% LTV

on a different note, anyone have any lendors that can do heloc on investment? big banks etc
Click to expand...

Try PenFed for non-owner occupied HELOCs.
 
I locked my rate a while ago, hoping to close in 2-4 weeks. LVT at 63%, rate 3%, costs about $3k. Loan depot.

Looking forward to close as my rate will plummet from 4.75% to 3% - the rental will become worthwhile.
 
SoclosetoIrvine said:
I just closed 2 weeks ago,went from 4.25 to 3.25% on an investment property, but I had to pay closing costs ($3k ish) 60% LTV

on a different note, anyone have any lendors that can do heloc on investment? big banks etc
Click to expand...

Penfed works great as USCTCPA suggested.

However, be careful, once you take heloc out on rental, refinancing first mortgage will become almost impossible until HELOC is closed. If you are happy with the rate, take the HELOC. Or, refi first, then take HELOC.
 
Cornflakes said:
SoclosetoIrvine said:
I just closed 2 weeks ago,went from 4.25 to 3.25% on an investment property, but I had to pay closing costs ($3k ish) 60% LTV

on a different note, anyone have any lendors that can do heloc on investment? big banks etc
Click to expand...

Penfed works great as USCTCPA suggested.

However, be careful, once you take heloc out on rental, refinancing first mortgage will become almost impossible until HELOC is closed. If you are happy with the rate, take the HELOC. Or, refi first, then take HELOC.
Click to expand...

It's just more expensive to do, not impossible. You have to do subordination or cash out to pay off HELOC and you get a hit for investment property.
 
Cares said:
Cornflakes said:
SoclosetoIrvine said:
I just closed 2 weeks ago,went from 4.25 to 3.25% on an investment property, but I had to pay closing costs ($3k ish) 60% LTV

on a different note, anyone have any lendors that can do heloc on investment? big banks etc
Click to expand...

Penfed works great as USCTCPA suggested.

However, be careful, once you take heloc out on rental, refinancing first mortgage will become almost impossible until HELOC is closed. If you are happy with the rate, take the HELOC. Or, refi first, then take HELOC.
Click to expand...

It's just more expensive to do, not impossible. You have to do subordination or cash out to pay off HELOC and you get a hit for investment property.
Click to expand...

You are right, not impossible but costly. I assumed that when HELOC is taken out, the combined LTV will push beyond what lenders prefer for cashout refi and they will ask borrower to paydown or payoff HELOC.
 
Cornflakes said:
Cares said:
Cornflakes said:
SoclosetoIrvine said:
I just closed 2 weeks ago,went from 4.25 to 3.25% on an investment property, but I had to pay closing costs ($3k ish) 60% LTV

on a different note, anyone have any lendors that can do heloc on investment? big banks etc
Click to expand...

Penfed works great as USCTCPA suggested.

However, be careful, once you take heloc out on rental, refinancing first mortgage will become almost impossible until HELOC is closed. If you are happy with the rate, take the HELOC. Or, refi first, then take HELOC.
Click to expand...

It's just more expensive to do, not impossible. You have to do subordination or cash out to pay off HELOC and you get a hit for investment property.
Click to expand...

You are right, not impossible but costly. I assumed that when HELOC is taken out, the combined LTV will push beyond what lenders prefer for cashout refi and they will ask borrower to paydown or payoff HELOC.
Click to expand...

Thanks everyone for the advice, will call penfed tomorrow.  I'm very happy with the 3.25% and won't be refi anytime soon.  most of those no cost refi's are only for primary anyways so I'm out of the refi market for a while. 
 
For my rental condo, I closed on 3.375% for a 30yr fixed in July. No cost and no fees. Brought it down from 3.875%. If I waited a few weeks, probably could've gotten 1/8th lower, but I'm happy to reduce my costs regardless. I used "Cares" on T.I. for this refi.
 
Anyone got quotes on rental property refi since the new rule went into effect wrt .5 cost tacked after 1st sept closing?
 
Cornflakes said:
Anyone got quotes on rental property refi since the new rule went into effect wrt .5 cost tacked after 1st sept closing?
Click to expand...

Everyone's loan is different so it isn't an apples to apples comparison to ask people what rate they got.

Either way, broadly speaking, rates are slightly higher from last month and also add on the 0.5 adjustment on top for refinances.
 
As of yesterday, Loan depot rate on high balance conforming on investment property refi is 4.125% fixed. Ouch!

World changes so fast in a matter of days.
 
This isn't an Agency price hit issue. This is a national rent strike issue coupled with a state of California "thou shalt not evict" mentality.  Landlords are at risk right now given political not financial risks. Why lend to someone who has tenants who may not pay?

My .02c
 
Soylent Green Is People said:
This isn't an Agency price hit issue. This is a national rent strike issue coupled with a state of California "thou shalt not evict" mentality.  Landlords are at risk right now given political not financial risks. Why lend to someone who has tenants who may not pay?

My .02c
Click to expand...

Becuase you can foreclose on someone who put down 20%, 25%, 30% then make money?  Unless they assume a drastic drop in RE prices, seems like it would be silly not to fun low LTV properties?
 
By the time a foreclosure is completed, the property rehabbed, the legal fees, past due property taxes and realtor commissions are paid - it's a loser... Whoops, I almost  forgot to include the years of unpaid mortgage payments and carry costs.

Lending to someone in anticipation of your eventual profitability through that borrowers failure is not a business plan. It's predation.

My .02c
 
I agree with SGIP.

To a landlord who'd be watching costs carefully has 7-8%  of property value as carrying costs (interest, Taxes, Insurance, HOA), Add selling costs 6-8%, add rehab costs, add all other fee and costs that lender ends up holding the bag for and one can quickly see that 30% equity evaporate so fast when the property is REO.

I think that looming economic crisis and eviction avalanche must be on top of mind for anyone parting with cash (lender).
 
I am certain that money printing will continue to fund and support to abate the renters crisis , eviction delays, and mortgages forebearance extensions. The reasons is everyone talking about it. The renters will get subsidies and the landlord owners will get pay, and the banks will get their cut.

MMT, More Money Today.  :)
 
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