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Investment Property Loan Rate
22 Jun2009
People can make serious money using real estate investments. The only problem with property investments is that you need some serious capital to start such a business. If you dont have enough money, there are several ways to get some. Among all the possibilities is of course a bank loan. If things go well your only problem might be the investment property loan rate.
1. Choices with investment property loans
Loan rates and investments loans can differ from each other greatly. Real estate investor loans nowadays can offer several different options to any borrower. Unfortunately, these options can sometimes be very confusing, so you need to be attentive and make the right choice. Most of the banks have a professional and knowledgeable staff that understands investor loans and can be of great help, and give you exact data on your investment property loan rate.
2. There is a variety of options
Due to the fact that there are hundreds of different scenarios and options available for you, it is impossible for an inexperienced investor to manage them. But, to get things started, here are some of the most common real estate investment loan options. A. 100% financing this is a great program for those who want to refinance or to sell a property, within a short while. There is generally no sort of prepayment penalty, but thus loan option is available only for residential properties.B. 95% piggyback financing the number 95% is calculated as follows: 80% first mortgage loan and the rest of 15% the second mortgage loan. The first mortgage has a fixed investment property loan rate that amortizes the mortgage, and the second one can be adjustable according to your personal needs. C. 90% financing and 80% financing in both of these cases there is no private real estate mortgage insurance, and it is available for all sorts of properties (single family, duplex, triplex and so on). In these cases, there is a fixed investment property loan rate.
3. A variety of Refinance Loan Programs exist
A.One type of financing is 90% financing 90%. The options available are: fixed rate, adjustable and interest-only. B. 85% financing in this case, cash out is acceptable, and will have private mortgage insurance. The other options are the same as the one in the 90% financing. C. 80% financing there is a fixed investment property loan rate, adjustable and interest-only. Cash is acceptable and no private mortgage insurance. D. 75% financing. This real estate loan option is great for stated income borrowers.You dont need to bother with seasoning or private mortage insurance.
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7 Responses to Investment Property Loan Rate
sweeetj99
June 22nd, 2009 at 1:56 pm
macressa
June 22nd, 2009 at 2:39 pm
There is rate information on the following site:
http://www.bankrate.com/brm/default.asp
ARE BEE
June 23rd, 2009 at 4:22 pm
I own 2 duplexes and living in a part of one of them. Your mortgage interest is deductible no problem. As far as the depreciation goes there are several different things. I broke it down in the offer when I bought my 2nd duplex. When you offer or when u do your taxes list a breakdown of your investment property. say $100,000 place. $20,000 is land (can't depreciate.) $55,000 main house ( depreciates over a 26.5 year schedule, its goofy but that was a government compromise), $15,000 out buildings like garages, and sheds (I believe is 10 years), and $10,000 (can't think of the word, but it covers all the furnishings, pretty much everything that is removable, like windows, fans, molding lights, blinds, sinks, toilet you know like that) ( I again am not sure but I think it is 10 years as well, could be 7 but I think 10) either way breaking it up like this will help come tax time and keep your cost basis down. When you invest larger items into the property like a new furnace or driveway that is also depreciated (not depreciated but deducted or credited however you want to look at it) over a 10 year period.
Also the other answerer was correct that depreciation lowers the valuing for when you sell it but if you die and leave it to your children or someone else, they will not have to pay taxes on the depreciated value. If you depreciate this $100,000 house down to the $20,000 land value and hold it for 40 year and your child gets it. Lets say at that time the house is worth $250,000. You would have to pay taxes on $230,000 where as your child gets it with the cost basis at $250,000 not $20,000.
Shawkat
June 23rd, 2009 at 6:01 pm
a) You can't "make" you lender do anything. How about YOU live up to the terms YOU agreed to?????
b) Since it is an investment property, you are not entitled to the same rates as a primary residence. Investment properties carry more risk for the bank, so they will ALWAYS have rates about 2% higher than traditional mortgages.
snndeibo
June 24th, 2009 at 4:33 am
I don't think you can. We're not doing modifications for anything other than primary res.
Tim
June 24th, 2009 at 9:48 pm
I see you may be new to investing.
The type of information you prode is more as to the type of loan you are seeking. All I can say is that investment loan generally cost a percent or two more than owner occupied.
A most important part of extending credit is the customer, his credit rating, past experience. That information is critical, not only as to the rate, but as to whether you get a loan or not.
Another important aspect is the cash flow pojection for the property. You will find that generally all expenses must be counted, but only 75% of the rent will be counted.
Did you know that you may be able to acquire this property in you qualified plan.
Christopher G
June 25th, 2009 at 2:13 am
I'm surprised. Bostonianinmo's answers are usually right on target. But a 3-unit qualifies as as a residential loan, not a commercial loan.
Nonetheless, you won't find 100% financing. A year ago you could, but not today. There are possibly some creative ways to use a seller second, and not necessarily from a rip-off artist.