Paying more or not for investment property refi

[Wade McMaster]

I've been looking into refinancing a house that we bought with an FHA as our primary residence and are now using as an investment property. It's now below 75% LTV, but every lender wants to charge us a higher APR because it's an investment property. Is this one of those things where we can shop around and find a lender that is friendlier to investors (or build a relationship with lender for better terms), or is the APR on an investment property refi going to be the same regardless of the specific lender?

[Zack Karp]

If you are looking at Conventional financing, all lenders should be within 0.125-0.25 of each other, unless you are getting hosed.  Investment property rates are higher than a primary residence.  Fannie Mae and Freddie Mac have LLPA's (Loan Level Price Adjustments), which are adjustments to the price (which in turn gives a higher rate) due to credit score, loan to value, occupancy, etc.

More simply put, in their infinite wisdom (and many years of real data), investors are more likely to default on a mortgage than someone who lives in the home.  Hence the higher rate, due to higher risk.

Best of luck!