is 8.9% a bad interest rate?

Financing, Hard Money Lenders, Private Money
1

EDITED

2

is this investor or owner occ.?

3

whats the senario? and if the deal is using bankstatements that should be considered full doc? Sounds like a straight 100% loan. Please clarify.

also with this loan size wouldn’t you benifit quite a bit to go with an interest only loan. If you plan on keeping the property a short time there a several alternatives that would help you cash flow better. is this noo or oo? I think you can probably do better than what you’ve got but can’t tell for sure with more details.

4

A few questions, Judd:

Is this Owner-Occupied or Investment?
What is the goal of this property?
How long will property be kept/live-in?
Is the borrower’s monthly gross stable to support the mortgage?
Any future plans or expectations of the borrower?

Basically… What are the goals of the borrower?

5

Looks reasonable if it’s an investment property and it could be reasonable for a primary residence if there are issues on your credit report which force you into subprime.

6

If your using bank statements that is considered full doc. there is a small hit to the rate for doing so in some cases. I need to know a few more things to answer your initial question.

  1. What state are you in?

  2. What’s you dti (if you happen to know)?

  3. what’s the property type?

P.S. Why not go with an Interest only arm to lower those payments. especially if your going to live in for less than 5 yrs?

7

Personally, from the looks of things I would go with an Interest-Only 3/27 or an Option Arm 3/27. There isn’t a need to go 30yr. Fixed since you’ll only be living in the home for 2-3 years. You want to preserve and spread as much of your cash flow around into other investments.

8
seems high compared to a loan I got 4 years ago. What do you guys think?

Let’s be honest. Rates have changed in the past 4 years. Of course they are going to be higher, unless you are going from subprime to prime.

Those rates seem pretty fair based on the limited information that you provided. Sure you may be able to shave a half or eighth.

I thought a full doc loan meant having W-2's, check stubs etc. My understanding is this is a stated loan using business bank statements to verify income.

In “A” paper, yes. In B/C Bank statements can be used as full doc

9

I would say with a single loan at 100% the rate is decent, but you shouldnt have a prepay. (it was my understanding that GA didn’t allow PPP on OO?). Had you thought about an 80/20?
You can definitely get a similar loan but with no prepay penalty.

I just checked my pricing. Payment is similar, but with no PPP, which, if you needed to sell early could cost you about 10k.

80/20
1st at 228k 7.25% $1555pmt 30yr fixed
2nd at 57k 13.625% $658pmt fixed rate 15yr balloon

combined payment of $2,213 with no prepays

Or a 3 year fixed for the 1st at 6.75% $1,478pmt 2nd mortgage would be the same.
combined payment of $2,136 with no prepays

10

This could be a stated loan it depends on the lender. Some lenders gdo state bank statement to prove assets. You might be able to get a lower rate than this. what lender gave you this price quote. Each lender varies their are some lenders htat do no doc but they want some kind of financials document if you really want o do no doc you need to go witha true no doc lender.

11

It depends on who the lender is. Most local banks might do a point or two over prime.

The prime rate is currently at 7.75%. Last year it was at 5.75%.

Ask your lender what index they are using.

Patti Porter