Securing Loans- % Down and Rates

[David Cox]

I have found a 1600 sq ft home in Lindale for $126,000. The schools her e are stellar and people are dying to get into the district. I have gone out to several lenders, Quicken was one but also 2 local lenders. The best rates I can get vary from 4.25 to 4.75% with 25% DOWN and about $2500-$3000 closing costs. I was hoping to only have to put 20% and get closer to 4%. I can get a 3.875 % Loan from Quicken but the fees and closing costs are through the roof. I think they're pushing "points" to buyers. The others have lower fees but higher rates. IF one is looking to hold 8-10 years-  what's your advise?  Are there lenders with low fees but also lower rates you know of ??  Thanks in advance !  David

[Shawn Ackerman]

@David CoxI'v done 3 Refi's with my lender since June and the rates were between 4.8 and 5.3.  Don't think you should get hung up on percentages going in but should be more concerned about when the property will be 100% leveraged(none of your money in the deal).  In my market I'm no money in around the 2 year mark so if I held for 8-10(which I will never do) I'd pay 10% interest if it meet's my 100% leveraged strategy.  Best of luck to you.  Great advice @JD Martin

[Matt Turbitt]

first off please stop talking to quicken. there is no situation on earth where they are the best lender. on investment real estate your most likely going to be in that 25-30% down window. but honestly the best thing for you to do is to start calling local lenders and asking the questions. Ask them how they can make this deal work. I'd call 10 of them for starters, skipping over the quickens, Wells fargo, chase, us bank, BoA, Huntingtons of the world.

[JD Martin]

If you are looking at holding 8-10 years, you're really talking peanuts any way you look at it on the rates. The deal is really what should make the most sense, and if you can't make this deal have strong cash flow without shaving a quarter to half a percent or without prepaying interest (points), you probably don't have a good deal. 

Those numbers are pretty much spot on for investment property these days. We did several cash outs last year and our numbers weren't far from that using several different lenders. 

[Shawn Ackerman]

@David CoxI'v done 3 Refi's with my lender since June and the rates were between 4.8 and 5.3.  Don't think you should get hung up on percentages going in but should be more concerned about when the property will be 100% leveraged(none of your money in the deal).  In my market I'm no money in around the 2 year mark so if I held for 8-10(which I will never do) I'd pay 10% interest if it meet's my 100% leveraged strategy.  Best of luck to you.  Great advice @JD Martin