are mortage rates the same for rental properties as for primary residence?

Asked by Mom, Houston, TX Thu Apr 16, 2009

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Rochelle, , Beaverton, OR
Thu Sep 3, 2009
I just asked a couple lenders..in Vancouver, rates for primary residence with 20% down are about 5%....rates for rental with 20% down are 5.825%..rates with 25% down on a rental are 5.325%
0 votes
Karen Dove R…, , White Salmon, WA
Thu Apr 16, 2009
I have to agree with Sam's response, however whenever you are ready to buy either as an investor or for your own personal use, first things first-talk to a mortgage professional to at the least get prequalified. There's nothng worse that looking at properties outside your price range and having to "step down." It also tells the seller when you do write an offer, you are prepared and have done your homework. Your offer will carry more weight with a letter from your lender confiming your are "ready, willing and most important of all.... able" to buy. Your credit scores, mortgage type/term will dictate how much down & the interest. Owner Occupied less than 4 units will be different than 1 single rental property purchase.
Good luck with your search.
Karen Dove REALTOR® with John L Scott Columbia Gorge
13 Years Accredited Real Estate Professional
541-387-3683



John L Scott Columbia Gorge Real Estate

White Salmon/Bingen ~ Stevenson ~ Goldendale, Washington

The Dalles ~ Hood River, Oregon
Web Reference:  http://www.GorgeForSale.com
0 votes
Bryan R. Lov…, , Lynnwood, WA
Thu Apr 16, 2009
The answer to your question is yes.

However, the 25% minimum is not always correct. I just closed a transaction with 20% down on an investment property. The Interest rate was higher but it was around 6% interest rate. Point here is you dont HAVE to have the 25% down.

Hope this helps in some way.

Best Wishes,
Bryan R. Lovell
0 votes
x, , Mill Creek, WA
Thu Apr 16, 2009
Hi there,
I'm a Seattle area Mortgage Broker and can tell you Sam is correct, rates for a rental property are significantly higher. Lenders do require at least 25% down on a purchase as well. Take this scenario for instance, to compare rental rates to primary:

30 year fixed for a single family home, 72% loan to value, great 740 credit scores. Primary: 4.75% Investment/rental: 5.5%. As you can see, investment property rates are at least .75% higher. The guidelines are also much more strict. Lenders require a significant amount (usually 6mo) of reserves (assets) and higher credit scores are required (700+) in most cases.

Give me a call if I can help further.

Best wishes,
Sofia Nygaard-Mortgage Consultant
425-368-4998
0 votes
SeattleHome.…, Agent, Seattle, WA
Thu Apr 16, 2009
No, rates for rentals are considerably higher, and equity/down payment percentage requirements are also quite a bit higher for rentals.
Web Reference:  http://SeattleHome.com
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