Any limits to buying down interest rate for investment mortgage

[Adam Kay]

As investment mortgages tend to have a higher rate, are there any limits to how much of the rate can be bought down? To make the monthly profit margin bigger, we would be looking to buy this down 8-12 points (2-3%) on a 30 year mortgage.

[Andrew Postell]

@Adam Kay in general, on Fannie/Freddie type of loans, you can buy down to the 3.25% mark....but I certainly would not suggest this.  For most of us, the goal is to buy MORE properties.  Which means, we need more money in the bank.  So if I am buying down a rate...then I have less money now to buy properties.  Yes, you would have more cash flow....but would you rather have to wait 3 years to have $5,000 or have $5,000 now. In 3 years, $5,000 won't even be worth $5,000 because of inflation. When you get prequalified your loan office can show you these types of numbers so it will make more sense then.  I hope this helps!