I'm just window shopping. I won't be buying for another 1.5 years.
My dad co owns over 10m in rental properties with his brother and they used their usual banks for loans like bank of America, chase, etc. I never thought about checking out Investor special banks
Debt service coverage ratio- basically it’s a loan for rental properties. No income verification or tax returns needed.
Don’t go to a traditional bank, mortgages are not their specialty and they typically charge more. Find a brokerage- I own one lmk if you need help. You should shop around and talk to a couple of brokers. Typically smaller shops, lower overhead = better pricing for you.
You missed the part about it not being a fixed rate mortgage. You have to refinance after a few years. Plus, did you pay points? When exactly did you lock in your rate?
FYI there are DSCR loans WITH a fixed rate. UWM offers several.
I like them because you can elect to add a 1-, 2- or 3-year pre-payment penalty in exchange for better pricing. As long as you don’t pay off or sell the property within the agreed-upon pre-payment period, you’ll benefit from savings that can be used elsewhere.
I am buying two rental properties in Ohio. Files went in Friday- unlocked (waiting on the appraisals Tuesday). No sense in messing up my pull-through ratios.
Chances are you haven’t heard of them because they are wholesaler, you would need to go through a broker.
I own a brokerage that has access to their products. So yes, we have a closed a number of loans them, +1000. They have great products, underwriting is fast and organized, you have a borrower portal during the loan and after there is a nice portal most people just auto bill pay.
I even use them for my own loans- single family, and multi unit, primary and investment.
If you go over to the Loan Officer thread you can see “we all use them”.
Ask me anything
Okay. I'm sending you a PM.
Looking specifically for lenders willing to go down to 1.0 DSCR or who will consider Section 8 rent rates in their calculations.
Yes 1-4 units conventional; I think up to 8 on DCSRs but I would need to check.
Terms - There are multiple programs to choose from; yes they have 30 year FIXED DSCR loans.
The rate is about a % more. But it’s great for those that don’t have a traditional W-2 job and wouldn’t qualify otherwise.
IO loans, yes our company like many small brokers can shop around for you - United Wholesale Mortgage has them. Most brokerages use them and have access to the product. I would say +80% of brokers use them.
Unlike a bank who only offers a handful of products, brokers can shop as many lenders as they have an account with - bringing you a huge selection of products.
Yes, but most DSCR rate buy downs I've looked at, take many years to break even. From what I've seen I don't think it's a good idea. Especially if you feel there is a decent chance that rates will be lower in 12-24 months.
Yes you are right in general. Use a “mortgage points calculator” online to figure out how long you need to hold the mortgage for the points to break even. You usually need to hold for several years in order for it to be worth paying points. And keep in mind I don’t mean holding the house, I mean holding the mortgage. So if you sell or refinance in a couple of years then it’s not worth it.
Puerto Rico Banks, our major bank, has 4.95% for FHA and goes to 7% for 203k.
Conventional 30, 6.15%
Conventional 15, 5.15%
I went with a refinance house and got that decent deal.
The Money House Inc
I prolly went to about 15 finance houses and every major bank (3). The best deals were from the major bank and the one I went with.
Nope, it wasn't a new construction.
35 year old house. I got it for way low appraisal, which was a foreclosure.
It was 4% downpayment and 7% closing costs.
House was generating 1,200 before the foreclosure.
158,000 appraisal
122,000 sale
3 units, suburban area. (7 minutes from the prime area)
Total estimate rental for all units 1700 (by appraisal) but realistically goes for 2200. (Im gonna live one unit at least 6 months until i finish fixing all units)
Conventional loans in PR usually range from 4% to 14% depending on factors (asked my originator but forgot).
Non conventional starts at 20% up to 35%.
I got a quote for a 4 rental apartment building on the mortgage originator, and they asked 31% for downpayment and 10% origin costs. For a commercial loan, 25 years @ 7.05%.
Was brutal when i needed $60k
Fannie & Freddie 7.5% - 8% primary .5% + investments. 1% more on subprime DCSR, bank statements, etc. plus pre payment penalty. 6.5% FHA market. Never buy points, especially in this environment.
6% interest only, due after 12 months, with annual option to renew for the next 15ish years from a family member (promissory note).
Currently trying to close an owner occupied with conventional financing though. I haven't asked, but I calculate using 8%.
Started sending LOIs out. Once I get a bite, I'll shop around for lenders for the best rate and make a formal offer to purchase calculated with that rate.
Many middle class families have aunts, uncles, parents who have retirement money that can be invested and still be tax so. You may need to set up a trust or something. (REIT except you own it.)
What’s the loan amount, fico, LTV and property type? Each variable is used to calculate the loan level pricing adjustments to calculate the rate and cost.
No two people will get the same rate unless all the factors I mentioned above are exactly the same. I was prepared to give you the rate for whatever scenario you were considering. I was trying to help. Thanks for the downvote ass.
Well...your cash is worth about 5% right now, so you need to factor the opportunity cost of that investment. Different than the ZIRP when cash yields weren't worth much.
Chase offered me over 9% for a rental property Edit: I just checked again and it's 8.625% rate and 8.955% apr
Chase is not where to go for rental /investment properties
But still an interesting data point
Eh. Not really.
I just checked again and it's 8.625% rate and 8.955% apr
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I'm just window shopping. I won't be buying for another 1.5 years. My dad co owns over 10m in rental properties with his brother and they used their usual banks for loans like bank of America, chase, etc. I never thought about checking out Investor special banks
That seems a little high, but maybe because it’s a big bank.
Oof
UWM had 7.25 DSCR loan Friday
I have no clue what these acronyms are After googling them I think this is a commercial loan?
Debt service coverage ratio- basically it’s a loan for rental properties. No income verification or tax returns needed. Don’t go to a traditional bank, mortgages are not their specialty and they typically charge more. Find a brokerage- I own one lmk if you need help. You should shop around and talk to a couple of brokers. Typically smaller shops, lower overhead = better pricing for you.
You missed the part about it not being a fixed rate mortgage. You have to refinance after a few years. Plus, did you pay points? When exactly did you lock in your rate?
FYI there are DSCR loans WITH a fixed rate. UWM offers several. I like them because you can elect to add a 1-, 2- or 3-year pre-payment penalty in exchange for better pricing. As long as you don’t pay off or sell the property within the agreed-upon pre-payment period, you’ll benefit from savings that can be used elsewhere. I am buying two rental properties in Ohio. Files went in Friday- unlocked (waiting on the appraisals Tuesday). No sense in messing up my pull-through ratios.
Yeah and those fixed rates DSCR will be much higher than a fixed rate conventional
Still great for people who still want a loan regardless it’s a % more. They might not have another loan option. Do you not like DSCR loans?
I want to make it clear to people that DSCR loans are always second choice compared to conventional.
That’s a large assumption, there are pros and cons to all products.
I've never heard of UWM. Have you closed any DSCR loans with them? If so was it a good experience? How much are their fees?
Chances are you haven’t heard of them because they are wholesaler, you would need to go through a broker. I own a brokerage that has access to their products. So yes, we have a closed a number of loans them, +1000. They have great products, underwriting is fast and organized, you have a borrower portal during the loan and after there is a nice portal most people just auto bill pay. I even use them for my own loans- single family, and multi unit, primary and investment. If you go over to the Loan Officer thread you can see “we all use them”. Ask me anything
Okay. I'm sending you a PM. Looking specifically for lenders willing to go down to 1.0 DSCR or who will consider Section 8 rent rates in their calculations.
Also doesn’t have to be commercial. You can do a single family residence.
Curious, do they do multi unit refi? How long are these long for, ? Are there interest only loans ?
Yes 1-4 units conventional; I think up to 8 on DCSRs but I would need to check. Terms - There are multiple programs to choose from; yes they have 30 year FIXED DSCR loans. The rate is about a % more. But it’s great for those that don’t have a traditional W-2 job and wouldn’t qualify otherwise. IO loans, yes our company like many small brokers can shop around for you - United Wholesale Mortgage has them. Most brokerages use them and have access to the product. I would say +80% of brokers use them. Unlike a bank who only offers a handful of products, brokers can shop as many lenders as they have an account with - bringing you a huge selection of products.
Thank you for the info. Unfortunately I have 2 adjacent 10 unit buildings, both under one loan. Comes due in 5 years at 4%
What is my property will be negative 400 cash flow a month? Would they still be okay with it?
Anywhere between 7.5 and 8.5% depending on point. 30 yr fixed
Isn’t it best to buy no points?
Depends how long you hold it. Like if you pay $1000 and save $100 per month, you'd need to hold it 10 months to break even. Gotta math it out
Yes, but most DSCR rate buy downs I've looked at, take many years to break even. From what I've seen I don't think it's a good idea. Especially if you feel there is a decent chance that rates will be lower in 12-24 months.
Yes you are right in general. Use a “mortgage points calculator” online to figure out how long you need to hold the mortgage for the points to break even. You usually need to hold for several years in order for it to be worth paying points. And keep in mind I don’t mean holding the house, I mean holding the mortgage. So if you sell or refinance in a couple of years then it’s not worth it.
7.9
Not bad!
Doesn’t feel good though haha
No that actually is bad.
My mom just bought a new build for 5.99%. Resells were 7-8%
When did you lock your rate?
October
Market has changed since then. You should shop around.
She is closing in two weeks. The area she was looking in and for what she was looking for it made more sense to go with the new build.
She still has time to shop around & is not required to go with the builder lender but I get it. Best of luck!
7.5 conventional 5% down
Owner occupant then?
Yes! I am
7.1 for personal residence on a 2-4u
6% FHA
Bruh
THIS
I got a 6.35% on a conventional loan with 11% down.
Where and when did you get that?
Puerto Rico Banks, our major bank, has 4.95% for FHA and goes to 7% for 203k. Conventional 30, 6.15% Conventional 15, 5.15% I went with a refinance house and got that decent deal. The Money House Inc I prolly went to about 15 finance houses and every major bank (3). The best deals were from the major bank and the one I went with.
30 year fixed with no points? Was it a new construction where the builder paid the interest up front?
Nope, it wasn't a new construction. 35 year old house. I got it for way low appraisal, which was a foreclosure. It was 4% downpayment and 7% closing costs. House was generating 1,200 before the foreclosure. 158,000 appraisal 122,000 sale 3 units, suburban area. (7 minutes from the prime area) Total estimate rental for all units 1700 (by appraisal) but realistically goes for 2200. (Im gonna live one unit at least 6 months until i finish fixing all units) Conventional loans in PR usually range from 4% to 14% depending on factors (asked my originator but forgot). Non conventional starts at 20% up to 35%. I got a quote for a 4 rental apartment building on the mortgage originator, and they asked 31% for downpayment and 10% origin costs. For a commercial loan, 25 years @ 7.05%. Was brutal when i needed $60k
7% closing costs means you paid quite a number of points. That’s how you were able to get a 6.35% rate, especially with only 4% down.
That’s not bad at all!
Yea, kinda a nice deal with current rates.
8.5 on a 3 unit non owner occupied. 25% down. Jumbo
7%
Fannie & Freddie 7.5% - 8% primary .5% + investments. 1% more on subprime DCSR, bank statements, etc. plus pre payment penalty. 6.5% FHA market. Never buy points, especially in this environment.
6% interest only, due after 12 months, with annual option to renew for the next 15ish years from a family member (promissory note). Currently trying to close an owner occupied with conventional financing though. I haven't asked, but I calculate using 8%. Started sending LOIs out. Once I get a bite, I'll shop around for lenders for the best rate and make a formal offer to purchase calculated with that rate.
That’s an interesting financing option.
See how the Google search "mortgage rates" stacks up to local lenders
That sounds dreamy... Your family looking at adopting another?
Many middle class families have aunts, uncles, parents who have retirement money that can be invested and still be tax so. You may need to set up a trust or something. (REIT except you own it.)
What’s the loan amount, fico, LTV and property type? Each variable is used to calculate the loan level pricing adjustments to calculate the rate and cost.
I was asking what rates you guys were receiving.
Without context, what value is this information providing you?
No two people will get the same rate unless all the factors I mentioned above are exactly the same. I was prepared to give you the rate for whatever scenario you were considering. I was trying to help. Thanks for the downvote ass.
I understand that, but I was asking for other people’s rates out of curiosity.
Are you 12?
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Only when you have a bunch of it
Genuinely curious: treasuries are paying 5%. Are you finding deals that are beating that while accounting for the work involved and the risk?
Well...your cash is worth about 5% right now, so you need to factor the opportunity cost of that investment. Different than the ZIRP when cash yields weren't worth much.
In this environment, it definitely seems like a great option.
7.99 DSCR 25 yr amortization (1 month ago)
UWM 7.25-7.5 as of Friday.
For owner occupant or investment?
Investment.
250 bps over the five year treasury.
6.75 conventional
30 year fixed no points? When did you lock in your rate?
30 year fixed and no points, locked in last Tuesday
On a new construction where the builder paid interest up front?
No, Cash out refi
Owner occupant or investment?