i am a newbie,this is my first post.i am working on my first investment prop and the interest rates seem high from what i have read on this forum. Iam trying to get a 100% loan for75,900 for a duplex. lender says An 80% loan at 7.5% and a 20% at 13%. My mid score is 806 and my wifes is 781. Also closing costs are 6000 plus. we own are own home and live in oregon, and make 50k/year. any thoughts or ideas would be appreciated
The 7.5% does not seem way out of the ballpark, but the 13% is a total rip-off. Does the $6000 include escrows? I would get a quote from another lender and compare. You have not said if this was a fixed rate or an ARM, that has quite a bit to do with the rate as well.
thanks for the reply Chris, these are fixed rates. If by escrow you mean prepaids like insurance and taxes,yes they make up about 2800 of the total. thank you
Not knowing all of the parameters i would make this observation;
Due to it being N/O/O the 7.5% First mortgage is reasonable. However, the second @ 13% seems to be a bit of a stretch.
As far as closing costs go…review your GFE and see where the majority of the fees are. If they are on the top then they are weighted towards the lender/broker.
thank you Mdhaas, what would be a good rate for the 2nd mort. in my case.
9.5 -10% is what I would guess. Are you going stated or full doc?
I guess since everyone else is making their observations, I should make mine. Again, as Mark noted, not knowing all the parameters.
The first seems out of line. A 30 year rate should be in the mid 6%s . Second no higher than 10.5-11%
What happen to your reply. It disappeared.
I guess we agree to disagree.
Everybody’s entitled to their opinions, I guess.
My recommendation would be to speak to your lenders on how you could achieve these same rates. I think what the problem may be is that you are not structuring these deals correctly. I cant give away all my tips!!!
Here’s my opinion for what its worth.
With a score over 800 and going full doc on a n/o/o I believe your first should be in the mid 7’s max, your second should be around 10.
Your closing costs seem really high, but I don’t know what the property taxes are up there in Oregon. But I believe the closing costs/prepaids are about a grand to high-watch your brokers fee’s, he may be trying to slip a little extra in for himself.
Try talking to a different broker, with a score over 800 it sure won’t pull your score down much.
Those rates actually sounds pretty good for your scenario. I have been in the mortgage business for years, and it sounds like you are getting a pretty good deal on the first. Is there anyway that you could take out a Home Equity Line of Credit on your current house so that you could put a down payment down? Generally that will keep your rate near the 6.500%(20% down) to 6.875% (10% down) range. Where is the property located?