Investment Property Financing is EXTREMELY competitive for loans under $417,000.
Investors can put down only 20%, and obtain 80% LTV financing at rates as low as 5% for a “No Points” Loan right now. (Assumes loan of $400,000; FICO of 740; APR is 5.25%). Many people mistakenly believe that a 25% down payment is required for competitive financing.
A 25% down payment (instead of 20%), will reduce the rate by about 1/4 per cent.
Many lenders also offer 15% down payments or 85% LTV loans with PMI, but the rate adjustments and the PMI are so high, that we talk people out of the financing. It is much cheaper to scrape up the additional 5% to get to a 20% down payment.
High Balance Loans (over $417,000) require a 35% down payment (or a 65% LTV).
And Homepath Financing (for Fannie Mae owned REOs only) allows as a little as 10% down for Investment Property financing. But, the rate is high.
Call Jay Voorhees at (925) 855-4491
Real Estate Broker, CA Bureau of Real Estate, BRE# 01524255, NMLS# 335646