Interest Rates & Closing Costs

[Adonis Yancey]

So I'm reading through Brandon Turner's book on rental property investing and a few questions came to mind. How do lenders determine interest rates? Is it possible to know what sort of interests rate I'll be able to get before purchasing a property? Is the interest rate based on the amount of the loan? Would it be possible to find out the amount for closing cost for when I'm doing my analysis on the property?

[DJ Richmond]

Hi @Adonis Yancey, there are a few factors that come into play when determining what your interest rate and closings costs would be, as mentioned above.

Best advice would be to speak with your lender before even looking at properties in the area. If you're looking at residential mulfi families (2-4 units) you'd likely get some type of 30 year fixed product and your lender would be able to give you a pretty good idea on the first call/meeting what your interest rate would be (after pulling credit), type of loan, downpayment, as well as closing costs for the loan.

If you're looking to make offers on properties in Boston or Massachusetts area, sellers won't even consider an offer without a preapproval/proof of funds. Most of the country I would imagine is the same in this type of environment.