First Property, Deciding Between Lenders

[Ryan Moore]

Hi, I'm under contract for my first property, a 4-plex.  I received loan estimates from 3 different companies (30 yr conventional).  Two of them are in contention.  1 has a lower rate by 0.25% and the other has closing cost lower by about $1400.  The difference in P&I every month is $20.  It would take just under six years for the lower interest rate loan to catch up to the other one. The return on both of them after one year is almost even.  I have the ability to purchase another property later this year so I don't want to deplete my cash.  Also I can't guarantee I will be holding this property for that long.  I'm assuming I should go with the higher interest rate, lower closing cost loan.  Sound like a plan?

[Russell Brazil]

You know each of these offers could likely structure the loan the same way as the other one...either increase the rate and lower closing costs or vice versa.  With them essentially being two same offers, I would go with the lender you like better.  I try to keep most of my borrowing with the same lenders to simplify things and build relationships with my lender.  This makes things easier for my future loans.