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Old 09-24-2007, 10:13 AM
 
44 posts, read 486,155 times
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We own a house in Raleigh. If we plan to buy a townhouse as a rental investment, suppose current rate for 30-yr-fixed is 6.25%, what the mortgage rate can be for this the secondary house? Will it be much higher? Anybody can give me some ideas? Thanks!
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Old 09-24-2007, 10:20 AM
 
Location: Cary, NC
19,691 posts, read 31,496,365 times
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Quote:
Originally Posted by helenocean View Post
We own a house in Raleigh. If we plan to buy a townhouse as a rental investment, suppose current rate for 30-yr-fixed is 6.25%, what the mortgage rate can be for this the secondary house? Will it be much higher? Anybody can give me some ideas? Thanks!
You need to talk to a mortgage pro, to help you determine this.
They should talk to you for free without pressure. Start where you bank.

We can all guess, but we would need more of your personal confidential information than you should offer in a public forum.

And it depends on the type of unit, how much you are putting down, your personal credit, and bill paying history.
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Old 09-24-2007, 10:31 AM
 
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Usually 0.5% higher than regular mortgage.
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Old 09-24-2007, 10:43 AM
 
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Or, you can get the going rate on a 30 yr. fixed PLUS 1.5-2.5 additional points depending on how much you put down.
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Old 09-24-2007, 11:18 AM
 
Location: McLean, VA
32 posts, read 86,916 times
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I am looking for an investment property as well. I just got off the phone with my mortgage broker and the builder broker. They both came back to me with the same Rate.

10% down - LTV = 90% the rate is 7.75% for a 30yr Fixed, No points

if you have an LTV = 25%, the rate is 7.125% for a 30yr fixed, No points

The 30yr Fixed IO's are in the 8-8.675% range.

It hurts so much because there are so many more investors in the market for homes now, but the rates are not attractive at all.
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Old 09-24-2007, 11:30 AM
 
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Investor loans carry more risk since you don't lose your home if you walk away.
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Old 09-24-2007, 01:44 PM
 
3,352 posts, read 7,492,981 times
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Quote:
Originally Posted by aperionvi View Post
I am looking for an investment property as well. I just got off the phone with my mortgage broker and the builder broker. They both came back to me with the same Rate.

10% down - LTV = 90% the rate is 7.75% for a 30yr Fixed, No points

if you have an LTV = 25%, the rate is 7.125% for a 30yr fixed, No points

The 30yr Fixed IO's are in the 8-8.675% range.

It hurts so much because there are so many more investors in the market for homes now, but the rates are not attractive at all.
What is not attractive about those rates?? Do you expect them to be 5% or what? Pay a little in fees and you are in the 6's. That is pretty darn attractive for investment property.

To me that is like people who says interest rates are up/high, when a 30 yr fixed is at 6.25%. Great rates if you ask me.

There is more risk when financing investment property, so it costs a little more.
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Old 09-24-2007, 02:28 PM
 
Location: Cary, NC
2,408 posts, read 7,436,891 times
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Quote:
Originally Posted by TimtheGuy View Post
What is not attractive about those rates?? Do you expect them to be 5% or what? Pay a little in fees and you are in the 6's. That is pretty darn attractive for investment property.

To me that is like people who says interest rates are up/high, when a 30 yr fixed is at 6.25%. Great rates if you ask me.

There is more risk when financing investment property, so it costs a little more.
What a sharp contrast compared to 6 months ago ... I believe I was quoted 6.375% no-point at 75 LTV from my broker in March.
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Old 09-24-2007, 04:31 PM
 
Location: McLean, VA
32 posts, read 86,916 times
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Yep, I locked in at 6.875% in June.

1% is a lot even on a 132k mortgage + you have to pay on your second if your are doing a 80-10-10
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Old 09-24-2007, 04:36 PM
 
Location: Cary, NC
2,408 posts, read 7,436,891 times
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Any little bit in terms of interest rate will affect your cash flow for the investment rental property, especially in the Raleigh market where the margins are pretty slim, even if you finance at 80 LTV or 75 LTV.

And the least out-of-pocket in terms of points/fees/closing costs, the more you have for your down payment or cash in your pocket to do something else.
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