Tough Question
I am using no income verification stated income to get a mortgage loan. My friend works at the company and has gotten my 100% financing. The only problem is that my intrest rates are going to higher. Around the 7% Range. This sucks because at these intrest payments its tough to rent out because I have a bigger mortgage payment than what local rents go for. I have heard of buying points off your mortgage. I was going to ask my sister to buy 2 points off my mortgagein exchange ill give her 5% ownership of the property. DOES ANYONE KNOW ANY ADDITIONAL IMFORMATION OF POINTS OR ANY OTHER WAY TO SHAVE INTREST OFF MY MORTGAGE????
A non owner occupied, no income verification program at 7% or even 8% is very good.
Nearly every lender will allow you to buy down the rate. Ask how many points you'll have to pay to get where you want to be at.
I agree with MyFrogger, that is not a bad rate for non primary residence. Were you buying this for casfhlow? If so, you should be more pessimistic when you run your numbers next time so you're not so close to negative cashflow.
GL
If you can't cash flow at a 7% rate, then you might want to look for a better cash flowing property. I am going to be writing an offer on a $125,000 4-plex. I am in a very similar situation as you, i'm buddies with my mortgage broker and am going to be on a no doc loan that he should be able to get at 100% financing. I over-estimate a 9% rate and I should still cash flow $600-$750/month(depending on utilities)
Re-look your properties, try to get 2% of the purchase price per year and you have a very solid cash flowing investment.
If you are buying property to add to your portfolio, or for a loss, OK. But I have to question your friend. People in the mortgage business may not always be helping you just because you have a credit score. Most people don't realize the work and dedication it takes to start a rental business. If you don't have the cash flow for PITI, then what are you going to do if something goes wrong like a new furnace, non-paying tenant, new roof, or not rented for a couple of months. These are things that need to be thought of before buying property to rent. There are many ways to get in the "business" without buying a property because you can. Be choosy!!!!!!!
Lori
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