100% NOO at 9.25% is this ok?

Financing, Hard Money Lenders, Private Money
1

I’m purchasing a NOO investment property with a 100% 5yr arm at 9.25% and $3k in closing. My credit score is 680. Does this seem high?

2

That’s not too bad…NOO is a risk loan from the start…add in the ARM factor and you have 2 strikes against you…lastly, 100% financing is also a huge risk for a NOO prop.

3

Michael is right. That is a respectable rate for the parameters. Lenders are starting to tighten up their N/O/O property programs as the amount of foreclosures continues to increase. High ltv N/O/O properties are some of the highest risk.

I am seeing rates in double digits for stated multi-unit programs.

4

Are you full doc or Stated?

I have a 100% full doc one loan at 7.625% interest only.

Thanks

5

As I can attest, your FICO score is only a portion of the things lenders look at. My mid-score is 750, but my DTI is approaching 50%. I recently got a 100% NOO loan with a 70% 1st at 7.25% and a 30% 2nd at some ridiculous rate, which I plan to pay off quickly.

6

Don’t forget that at some point this rate will start ‘adjusting’ (and they rarely adjust down!) so thake that into consideration when you are doing your cashflow analyses…I assume this is a ‘buy and hold’…?

Keith

7

The more paperwork/documentation you can show, the better your interest rate will be.

8

Be happy your getting a loan. Thats very aggressive. Interest rates are derived from risk. The fact is if your investment goes belly up so does that investors loan. Hopefully once that property your buying gets fixed up or increases in value, you could refinance at a lower fixed rate at a lower LTV.

Good Luck