Interest rate 3.62% with 2 points

[Ihor Kucheynyk]

Hello BP community

I'm in the process of buying a duplex in Florida for $350K with 25% down. Lender quoted 3.62% with 2 points for investment conventional loan (non owner occupied).

I Just got a loan estimate which is showing closing costs are $18K, loan costs itself are $11K, this is the most expensive closing costs I ever had.

Is this loan a ripoff and I should shop around? I would appreciate you opinion.

[Stephanie P.]

@Ihor Kucheynyk

It's far from a rip off.

Conventional rates are on the rise and yet they're still some of the lowest rates in history.  The par rate for a 2 unit investor loan is in the neighborhood of 4.875%.  Par means no discount points.  I'm seeing 2 points gets you down to about 3.25% (moderator, US Commercial doesn't do conventional financing, so this is not a solicitation), but there's no way to define this as a rip off.

Your points are going directly to to buying your rate down and total lender fees for underwriting/processing/administration etc...of $1290 are not horrific.  You've got significant title charges, taxes prepaids etc..., but it's a good size loan which equates to larger costs.

Stephanie