are these rates typical

Financing, Hard Money Lenders, Private Money
1

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

2

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.

3

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

4

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.

5

thank you Mdhaas, what would be a good rate for the 2nd mort. in my case.

6

9.5 -10% is what I would guess. Are you going stated or full doc?

7

full doc

8

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%

9

Mark,

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!!!

10

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.

Good luck

11

Hey-
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?