Financing in Cranford>Question Details

Chris, Home Buyer in New York, NY

Will mortgage rate for Owner Occupied two units higher than Single Family? I am a first time home buyer and the home will be my primary resident.

Asked by Chris, New York, NY Wed Jan 6, 2010

I am currently going through a deal for a two units property, and I will be residing in one of them as my primary resident. There are three leaders I am working with to secret a loan and two tell me different thing after I told them that it will be an owner occupied two unit.

The broker from my local bank says the rate is same as single family but there is 1 points in fee

Mortgage Broker A simply quoted a much higher rate (this broker is the most competitive when he quoted for the single family)

Mortgage broker B say the rate is same as single family.

I try to get some references online to determine who is correct but cannot seem to find any. Can someone point me to the right direction?

Of course, I am open to other leader as long as they are competitive. I have excellent credit if you are wondering.

Any help will be appreciated.

Thanks in advanced.

Chris

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Answers

4
Chris,

The first two answers below are correct. For Conventional, you'll eat about a point for the same rate on a 2-fam as a single. You can take a no-point loan as long as you know the rate will be higher. For FHA there won't be a differential.

Good luck with your purchase.

Kind regards,

Jason Diperstein
E Mortgage Management
800-793-9633 x156
jdiperstein@emmloans.com
0 votes Thank Flag Link Thu Jan 7, 2010
Hi Chris,

There is no difference in rates between SFR and 2 unit owner-occupied. You should be able to get a really great rate. I think buying a 2 unit is a very smart way to go.
0 votes Thank Flag Link Wed Jan 6, 2010
Chris,

It is all very simple, so I'll clear up all the confusion. There are conventional loans and FHA loans (among others).

With a conventional loan, you have two options when buying a two unit building:

1. Pay points.

2. Take a higher rate instead of paying the points.

With an FHA loan, the rate is the same for a two family as a single family.

Feel free to contact me.

Hope this helps.

Good luck.
0 votes Thank Flag Link Wed Jan 6, 2010
Bank and A are correct. There is a point 1 pt adjustment for Fannie mae 2 unit properties. Broker A is just raising the rate to compensate.

Depending on how much you plan on putting as a down payment, you may want to go with an FHA loan, as FHA has no adjustment for 2 unit properties. Feel free to contact me at 908 531 6170 or naitch6203@yahoo.com or michael.r.byrne@chase.com
0 votes Thank Flag Link Wed Jan 6, 2010
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