How do mortgage rates for investment properties differ from rates for traditional owner-occupied homes?

Question

From what I understand, investment properties generally have to pay a premium on the interest rate.

Answer 1

Yes, when it comes to agency (Fannie and Freddie) the adjustments to pricing is 1.75% under 75% loan to value (LTV) and 3.00% 75 to 80% LTV.  To really be able to quote interest rates basic information is needed.

Answer 2

The rate doesn't jump by that much.  The pricing for the rate does - 1.75% typically is .50% difference in rate.  They have to a break point somewhere and 75.01-80%  loan-to-value is priced worse than up to 75.  That tells me the investors much prefer under 75% as an investment option.

Answer 3

True Investors use OPM strategies and don't worry about the small stuff like Interest Rates,

Loans are usually Short Term for 6 months up to 1 year to purchase Investment Properties..  They are leveraging the money and land to create Cash Flow;  win- win-win for everyone concerned, Seller-Investor-Renter or Buyer.

Rehabilitated properties can be refinanced with Equity in the package, a win-win-win for the Investor-Bank-Buyer!

The rates that always concerned me, when NEW to the Real Estate Arena was the tax issues.

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