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TFXK
05-11-2005, 02:56 PM
What kind of terms are people getting for
Investment Property Financing.

I was interested in 90% financing for 30 years (fixed rate).
(10% cash down)

I was surprised to see rates quite a bit higher for Investment Property
than what I could get for a home I planned to actually live in.

Is it standard to pay such a higher interest rate for such loans?

One company just quoted me 6.875% plus 1 point - WHAT?

I just checked my Credit Rating and come up with a score in the 780s.
Getting a loan is certainly not my problem. Its just that finding decent terms
seems to be harder than I imagined.

It seems once you say "Investment Property" lenders drop you down 3 pegs,
and jump your interest rate up a couple pegs as well. Doesn't matter
FIXed or ARM I will pay more, simply because its an investment property.
:SM017:

Is there a better way?

Note: Seller offered financing, but with too many stipulations to make it
worth my while to take him up on the offer. Felt I could do better at any
bank / mortgage co / credit union Maybe I was wrong (again).

:SM006:
Maddog56
05-11-2005, 04:01 PM
Investment loans/mortgages carry higher interest rates because investors are more likely to walk away from a loan, leaving the mortgagor holding the bag, than is someone who lives in a house. The lender is using higher interest to offset the risk of loss.
kimesha
05-11-2005, 04:17 PM
i got preapproved for an investment loan such as the above one you mentioned. 90% with 10 % down with an interest rate of 8.5%. but my credit score was lower than yours 705. your rate doesn't seem that bad
TFXK
05-11-2005, 07:47 PM
Investment loans/mortgages carry higher interest rates because investors are more likely to walk away from a loan, leaving the mortgagor holding the bag, than is someone who lives in a house. The lender is using higher interest to offset the risk of loss.

I'm OK with paying more, but ...

It appears that they have pushed the interest rate up a full % point
(at least in my case). That means and extra $23,500 in interest
on a 100K loan. Thats a lot of "offset the risk" :eek: IMHO.

Sorry, I'm just barking. The increased interest rate was more than I
imagined and I needed to vent.

Tom