Just curious what terms others are getting on basic residential rental loans for homes in the $25k-$200k range

.ie

Local bank

$400 loan fee,

$500 appraisal

$400 title opinion

20 year am

5 year lock, 7.5%

Applied for loans recently. 20 years in the business, history with both banks.

Bank 1: 1 point fee, 8.75 fixed for 5 years, Appraisal, Title, 80% LTV

Bank 2: $750 fee per loan, 7.5 fixed for 5 years, appraisal,

title

Too high.

I just did 2 loans

300k

10 year fixed

6.5%

No prepay penalty

2100 total fee

I payoff quick

500k

Loc

3100k fees

8.75 %

Variable on prime

I agree rates are to high.. I stopped putting money stock market

An putting all money towards loans

Don… I can do both.

Make payments, slightly accelerate payments on loans that have reset dates that are coming fairly soon so they get paid off before the rate changes upward. Make sure I can build up enough cash to cover 2-3 roofs, HVAC replacements, etc, and over that I’ll accelerate payoffs faster.

Barb, I pray that future is averted for you.

I agree, Don, I'm curious, too.

I was lucky enough to do several deals at 4.5% locked in for 10 before rates got jacked.

Local bank

$600 loan fee,

$1,650 appraisal

$700 title

20 year am

5 year lock, 7.5% with 6% floor on a small commercial warehouse. I believe the payment the bank quoted me was $850ish.

Ray,

I was going to balk at the high appraisal until I saw it was commercial.

Those seem like good numbers.

That is the lowest possible rate that the loan will go to.

The bank has a small prepayment penalty of 1% of the original loan amount and that applies for the first five years.

Now in the past I played the reasoning game with them. Say the rates suddenly drop from 7.5% down to 4% at the reset period. The loan is written to drop only down to 6%. But if you explain to the bank, that they stand to lose the loan and more money in interest than the spread, they may change you a fee - typically the pre-payment penalty with this bank, and they manually adjust the loan to the market level.

I am not that excited about this rate, and I do have another CD coming do in about five months. I plan on dropping the CD on the loan principal cutting the loan down about 40%. So why do I do that instead of applying it to the next deal or just start out with a smaller loan? I want to take the amortization and tilt it so that the majority of my payments are going towards principal instead of interest.

I, like yourself am in a low cost area and this banker reminds me that he is authorized to approve me for a specific amount quarterly. The benefit of dealing with a small local bank, the VP hollers down the hallway to President of commercial lending and 90% of the deals get approved without loan board approval.

Thanks Ray, once again you are a wealth of knowledge.

My credit union was great at getting fast and easy money. Local, small and the branch manager understood how to do business.

He retired and it all went away. They started wanting me to jump thru more hoops than the one time buyers. Last loan I got with them I told them never mind. I felt that I was being treated unjustly and would take my loan elsewhere. Ten minutes later I got a call saying they would do it. I followed thru because I had already gotten the appraisal. That was the last loan thru them tho.

We have one other small (2 branch) bank in my area that is good to work with. They don't have an online presence and max their loans to 20 years for OO and 15 for me.