Investor · Dallas, TX · Member since 2017 · 23 posts · 4 votes
Hi all,
I’m looking at getting some advice on financing some $50k SFH homes. I received a quote from one lender offering 5.625 interest rate with 1.375 lender points and 6.446 APR, these are assuming a 15% down payment. As this is my first investment property I’m wondering if these rates are the norm for an investment like this? I also called another lender and they informed me that due to the size of the loan the fees that come with it may be too high and considered illegal. Essentially I’d like to know if these rates are par for the course or if anyone has any better methods of financing small SFHs like these?
I just went under contract with a condo for $61k and received very similar numbers to what you got. 5.875% interest with 1 point. We had a frustrating time finding a lender that would help finance the property for us (with 25% down). I am fairly new to this but I think it is due to the fact the loan is so small and it is for an investment property.. Good luck going forward.
Investor · Dallas, TX · Member since 2017 · 23 posts · 4 votes
8y
thanks for the replies everyone. I just felt like the fees compared to the mortgage size were out of whack but I guess that comes with the territory. I’ll check out US bank, my credit is over 720 easily so I’m hoping to secure a better rate
Guy with Great Hair · Austin, TX · Member since 2013 · 2k+ posts · 4k+ votes
8y
On these small loans I take the higher rate and lower points. Wrap in the loan and keep all the cash possible in my pocket.
the difference between 4.5% and 5.3% on my last loan was like $15/month and the breakeven period was a bit over 10 years. I'll gladly trade for cash now.