Vendor · San Diego, CA · Member since 2016 · 55 posts · 16 votes
Closing on a triplex in Ohio City and my current lender is trying to charge me 1% origination and 5.375% fixed on a 30 year loan. Purchase price of the deal is over $300k and my lender claims it's the best rate I'm going to find. It's a semi-large bank and working with a local credit union seems more appealing (plus the added benefit of proving him completely wrong). Let me know your thoughts!
Real Estate Agent · Westlake, OH · Member since 2014 · 186 posts · 165 votes
8y
Shray a few things to consider:
With conventional lending, there are add-ons (points/rate) for non-owner occupied and additional units. So you can’t compare an investor rate on a 3-family to an owner occupied single family rate - two different things.
I think local credit unions for the most part are going to be limited to working with people who live/work in the area. Credit unions have to have some sort of membership requirement as part of their charter, e g firefighters and their families who work in X area, residents of X county, etc. Many sell their loans so are going to offer you the going rate.
The smaller local banks that I have talked to are reluctant to work with out of state investors, probably due to the added legal cost of tracking them down if something goes wrong.
The local banks will be aggressive when it comes to terms, not necessarily rate. I talked to a few local banks the last time I refi'd as I wanted to keep the property in my LLC. They were willing to lend that way but at a commercial rate = 5.25% adjustable with a 5 yr balloon. Their conventional rates were about the same as the bigger guys.
If your loan is approved and the numbers work, I wouldn’t start shopping around now. 5.375% may not be the absolute best rate you’re going to find, but it isn’t worth jeopardizing a good deal over an 1/8 or even 1/4% difference in interest rate.
Contractor · Cleveland, OH · Member since 2014 · 317 posts · 181 votes
8y
Hi Shray. I flip in Cleveland and am also located in so cal. Have you talked to anyone at First Federal of Lakewood? I'd be happy to give you a contact or two there on the residential side. Anytime you want to talk shop feel free to hit me up.
Real Estate Agent · Westlake, OH · Member since 2014 · 186 posts · 165 votes
8y
Shray a few things to consider:
With conventional lending, there are add-ons (points/rate) for non-owner occupied and additional units. So you can’t compare an investor rate on a 3-family to an owner occupied single family rate - two different things.
I think local credit unions for the most part are going to be limited to working with people who live/work in the area. Credit unions have to have some sort of membership requirement as part of their charter, e g firefighters and their families who work in X area, residents of X county, etc. Many sell their loans so are going to offer you the going rate.
The smaller local banks that I have talked to are reluctant to work with out of state investors, probably due to the added legal cost of tracking them down if something goes wrong.
The local banks will be aggressive when it comes to terms, not necessarily rate. I talked to a few local banks the last time I refi'd as I wanted to keep the property in my LLC. They were willing to lend that way but at a commercial rate = 5.25% adjustable with a 5 yr balloon. Their conventional rates were about the same as the bigger guys.
If your loan is approved and the numbers work, I wouldn’t start shopping around now. 5.375% may not be the absolute best rate you’re going to find, but it isn’t worth jeopardizing a good deal over an 1/8 or even 1/4% difference in interest rate.
Equity Raiser and Turnkey Provider · Cleveland, OH · Member since 2016 · 4k+ posts · 1k+ votes
8y
Originally posted by @Account Closed:
Closing on a triplex in Ohio City and my current lender is trying to charge me 1% origination and 5.375% fixed on a 30 year loan. Purchase price of the deal is over $300k and my lender claims it's the best rate I'm going to find. It's a semi-large bank and working with a local credit union seems more appealing (plus the added benefit of proving him completely wrong). Let me know your thoughts!
You do not have to go with people who are local. You can go with any lender you want as long as they can lend in Ohio. Sometimes it pays to find more investor-friendly lenders regardless of their location.
Pleasanton, CA · Member since 2015 · 246 posts · 115 votes
8y
Originally posted by @Account Closed:
Closing on a triplex in Ohio City and my current lender is trying to charge me 1% origination and 5.375% fixed on a 30 year loan. Purchase price of the deal is over $300k and my lender claims it's the best rate I'm going to find. It's a semi-large bank and working with a local credit union seems more appealing (plus the added benefit of proving him completely wrong). Let me know your thoughts!
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
7y
Originally posted by @Account Closed:
Closing on a triplex in Ohio City and my current lender is trying to charge me 1% origination and 5.375% fixed on a 30 year loan. Purchase price of the deal is over $300k and my lender claims it's the best rate I'm going to find. It's a semi-large bank and working with a local credit union seems more appealing (plus the added benefit of proving him completely wrong). Let me know your thoughts!
You are narrowing your market by only looking to lenders who are local to Cleveland. So many lenders out there can do loans in all 50 states. Cast the widest net to get the best results. I see a lot of national or regional lenders doing better deals than some of the local credit unions around here. Plus a lot of the small operations leave a lot to be desired when it comes to the bank's tech and things of that nature.
I just bought a SFR in Parma and the rate was 4.875%. I'm not sure if there would be adds for yours due to it being a triplex, but it couldn't hurt to ask.
I don't usually give out recs because, quite frankly, I rarely meet people in the real estate/mortgage industry who are actually good at their jobs. But this LO is legit. Let me know if you would like her contact info and I will PM you.