# Investor mortgage rate - Posted by Kathleen

Posted by Dave T on March 17, 2002 at 14:04:43:

I suspect that you are right. I sold a property last year to a buyer who had a similar financing plan, though his second mortgage interest rate was closer to 11% if I recall correctly.

The borrower had marginal credit, and was recently laid off from his job. I put the buyer into the property on a monthly rental, and postponed the sale by six months to give the buyer time to get some employment history at a new job, but he did not have a lot of ready cash to bring to the settlement table. I contributed \$2500 toward closing costs to facilitate his purchase while increasing my sale price by only \$1500.

Win-Win for us both.

Investor mortgage rate - Posted by Kathleen

Posted by Kathleen on March 16, 2002 at 20:03:50:

I am purchasing a rental house for under \$100K and would like to know if there is an on-line site for investor loans. I’ve called several mortgage companies and the best I have found is 7.8% with 10% down. One broker told me that I should expect to pay about 1% higher than for an owner occupied loan.

Re: Investor mortgage rate - Posted by Rose

Posted by Rose on March 17, 2002 at 24:11:00:

I am in the process of purchasing a home to rent out. I been shopping around and called few lenders from this website-bankrate.com

Most of them say you need 10% down and 7.5%-8% interest rates. I found someone who can do 80% and 20%
loans. What this means is one loan with 80% loan and one loan with 20% loan. You can use 20% loan as your down to avoid PMI. 20% loans are higher interest than 80% loan. You will have 2 loans with 2 different interest rates. If you have a good credit you can add

Here is how it works:
I got my house for 113K + \$3500 towards closing. So the actual purchase price is = \$116,500

80% of 116,500 = 93,200 @ 7.5% = 651.67
20% of 116,500 = 23,300 @ 8.5 = 179.16
No PMI
Total payments = 830.83

2nd option:
10% down on 116,500 = 11,650 (comes from my pocket)
Loan amount = 104,850 @7.5% = 806.21
PMI (I am not sure exact amount) = 44.00
Total payment = 850.21

If you look at the both it’s actually costing more when you put 10% down from your pocket. I am thinking of going with 80% and 20% with zero down.

Hope that makes sense.
Rose

Re: Investor mortgage rate - Posted by Paul

Posted by Paul on March 17, 2002 at 20:36:53:

What lender are you using to get this 80% and 20% loan from? I’m would like to do the same. Is it from the same lender or different lender? Do you know if this is legal without telling any of the lenders what you are doing?
Is it the same lender who is offering the slightly higher rate with a 10% down pmt? Can you tell me who that lender is also? All the lenders I talk to tell me I have to put down 20% for Investment properties.

Thanks

Re: Investor mortgage rate - Posted by Dave T

Posted by Dave T on March 17, 2002 at 09:31:20:

My calculator says that the PMT on 104,850 @7.5% = 733.13

Re: Investor mortgage rate - Posted by Rose

Posted by Rose on March 17, 2002 at 21:26:22:

Paul, I went to website Bankrate.com and plugged in my state and city areas. It brings up different lenders who lend you in your state.

I also gave some information on loanweb.com saying that I am shopping for loans. It gave me bunch of lender names and they actually called me. I havn’t put any application yet (am planning this coming week) but that’s the information i got by talking to lenders.

10% down is pretty standard every one told me. It all depends on how your credit is and what kind of assests you have they can bend down rules at times. I was told they could go as low as 3% down with investor loans. Of course your interest rates vary depending upon your credit ratings.

I am not quite sure how 20% loan is handled from a different lender or not. I am going by the information it was given to me and until I put an application I have no proof. Your interest rates may be little higher than what I have mentioned they vary according to credit what I have heard.

Yes, it is legal as far as I know. On residential homes they do this (80% 20%) in my area and there are several zero down loans especially on residential.

Rose

Re: Investor mortgage rate - Posted by Rose

Posted by Rose on March 17, 2002 at 12:40:13:

Dave, you are right. I did not check the figures I was given by a lender.

Thanks for catching that, even then I still think that is a better deal with zero down.

Rose