Conventional Loan for an Investment Property - Lender Fees

[Julian Inoue]

Hi BP,

I have a lender question I hope you can help me with. What should I expect to pay in loan fees when acquiring a loan for an investment property? I have great credit, zero debt and this will be my first conventional loan. All in, what do you pay the lender when getting a loan?

I also spoke to a lender in GA and asked for an estimate for a $250K property, and this is what they came back with:

- Originations Fees (~1.3k)
- ~$4k to secure a rate of 3.25%, ~$1.4 to secure a rate of 3.625, or $0 for a rate of 4.99%  (with a 20% down payment)
- Appraisal (~$700)
- Title fees (~$1.7k)
- Taxes and Government fees (~$1k)
- 1 year of insurance upfront (~$1.4k)

- 4 months of insurance and property taxes to hold in escrow for next years payments (~$1.4k)

So all in ~$12k, does this seem like a lot? I was expecting around $7k from reading books and looking at other people analysis.

Any input is appreciated.

Thanks!

[Jason Smith]

your points fee is too high... You should really consider a few things 1) checking to see what putting 25% down would do to the rate, 25 LTV is the spot to get the best rate on investments 2) see what Raymond Rodriguez can do for you - I see him posting on this site and quoting rates and his rates always look good 3) check out Provident dot com and the live rates button. The info you provided with 25% down is $0 points for 3.25%. 20% down and the points cost explode. Provident isn't going to hold your hand, and be nice, or even talk to you on the phone, everything is through emails and document centers. Your DTI better be amazing to get approved with Provident, so if you have a bunch of other properties with mortgages Provident isn't for you. If you have other new properties that show loses on your last years tax returns, Provident isn't for you. Their underwriters will analyze your documentation, ask for more documentation, make you sign affidavits like no other lender. If you can figure stuff out by yourself and it is your 1st property Provident has amazing rates.