Financing Investment Properties - Posted by jeremy fl

Posted by Eric (NH) on May 19, 2001 at 17:40:24:


I believe that the going rate for an Owner-occupied, first position mortage is no less than 7% with zero points. And many banks are offering Home Equity Lines/Loans for Prime (now 7%) with no closing fees.

Eric (NH)

Financing Investment Properties - Posted by jeremy fl

Posted by jeremy fl on May 17, 2001 at 07:06:57:

My question is about putting financing on properties that I bought for cash. Here is what I am thinking of doing, please let me know if there is a better way. I am thinking of getting fixed Home Equity Loans. They will do 90% of appraised value, which will be about 110% of what I bought the properties for. They will also lock the rate @ 8%. This is the same small bank I have my working line of credit with. Also closing costs are minimal.

I haven’t even looked at a tradtional mortgage yet. What kind of rate can be had that way?

Re: Financing Investment Properties - Posted by Matt_IL

Posted by Matt_IL on May 17, 2001 at 16:39:26:


I believe home equity lines are only available for owner-occupied properties (ie your actual home where you live).

Are these houses being rented out? In that case you need a non-owner-occupied (NOO) investor mortgage. It shouldn’t be too hard to find one that goes up to 90% (with PMI) or 80% without. I am personally in the process of re-fi’ing a rental house at 80% LTV at % interest.

All investor loans are conventional loans; don’t bother looking at FHA or VA loans because those are owner-occupied-only as well.

A NOO first-position mortgage will probably give a competitive interest rate with your home equity loan. Home equity loans are normally second-position mortgages which means they are riskier and therefore carry a higher %. You mentioned 8%; That’s 2% or so higher than an owner-occupied first-position mortgage.

  • Matt