80/20 Investor loan and rates

Financing, Hard Money Lenders, Private Money
1

Ok, last post of the day. Promise! :stuck_out_tongue:

If an investor goes to get an 80/20 investor loan, can the seller be the one who carries the (20)? And if so, what kind of rate would I be looking at for the 80% for a credit score of about 715-720?
Would the investor be able to get the loan where the seller (if they offered) could pay all buy/seller closing costs and have that them taken out of their profit?

Would this scenario be a way for the investor to come to closing with no money of his/her own?

Thanks!
JayDee

2
Would this scenario be a way for the investor to come to closing with no money of his/her own?

Even though you have covered 100% of the purchase price, you will still need closing costs.

You may be able to negotiate some of them with the seller.

As for the 20% seller. Yes. It is called a seller carryback 2nd.

3

I see. I have heard that term before. With the seller carrying back the second (20%), that would eliminate the lender asking for a downpayment if that lender will do an 80LTV correct? thus eliminating any need for any money at closing besides closing costs.

What kind of documentation would the investor have to bring to the lender to prove that they got a seller carry back second? Would it be a signed copy of the promisorry note between then seller and buyer?

Do you know what kind of A Paper rates are out there for the 80%?

Thank you!
JayDee

4

expect rates on 80% ltv non owner occupied with full documentation to be around high 6s to mid 8s with 680+ credit scoresā€¦ full documentation gets you the best rateā€¦ stated incomeā€¦ good ratesā€¦ no documentationā€¦ highest ratesā€¦

5

Your eprobaly looking at something in the mid 7 %. But like everyone has already mentioned there will be closing costs and of course iof its an investment property you may have to at the least show reserves and that you have sufficient funds to cover closing.

6

Seller has offered to pay all closing costs. And he is looking to have that paid out of the loan amount. Is this possible with an investor loan?

7

Definitely possible- will you keep the property long term and how much closing costs will the seller pay? If you are keeping it long term, and the seller will pay closing costs, you can get your rate down into the 6ā€™s with points, for example, 2 points= 6.375 full doc 30 yr fixed, 1 point= 7.125, 0 points = 7.875. This is just speaking in general terms.

8

Ah this sounds like it may be a good idea. Good deal and thanks for the suggestions! :wink:

9

Seller can pay as much as 100% of closing costs. Have a leeter from his attorney or an addendeum to the contract statinbg such. As for reserves you can use up to 50% of one months rental income as STATED reserves (just provide4 leases).

Most prople here are very experienced in the finance industry and Im sure that between all of us you will get all the answers you need to make your project work. Bets of Luck to you.

10

Thanks folks! You all have been a great help. And I am slowly but surely learning what I need to know to become successful in this investing biz.
Glad I found REI Club! :slight_smile: