Should I settle for 70% LTV?

[Thomas Fawcett]

Hey Guys, 

I have a duplex I purchased for $160,000 in a good part of Des Moines, IA (Beaverdale for the locals).  The Assessed value is $200K before we added an additional conforming bedroom on one side making it a 2-1 and a 3-1.  We put $20,000 into renovations bringing my total purchase and rehab cost to $180K.  Monthly rental income is $2,100.   

Our goal is to hold this property so we are looking for a 30 year fixed loan.  We purchased the property in June so December will be our 6th month mark.  credit score is high, I have a good paying W2 income, and no other debt.  The lender I am talking to quoted me 6% and only 70% LTV.  Should I shop around for better rates?  

This is our first property so any advise would be awesome.  If you are local, do you have a recommendations on a lender?  Thanks!

Thomas

[Aaron Taylor]

My recommendation would be to try and find a lender who would let you keep as much of your money in your pocket as possible.  Check your local credit unions, since they're not held to the same standards as banks sometimes they can offer lower rates and work with you more.  Especially when you're starting out, you're going to need that capital for deals #2, #3, etc.  Local banks not going through Fannie/Freddie might be able to even allow you to only put 20% down but the loan terms may not be as good (7 or 10 year arms a lot of times).

Most important thing is making your starting capital go as far as possible.  You're going to run out of it eventually probably, but it would be better to make it last as long as possible.