Which mortgage company is best rated for 40 year loans on investment properties? Are there any pitfalls?

Question

I am trying to refinance a second home that is an investment property. I do not intend to keep it for many more years and so 40 year refinancing made sense to me

Answer 1

MortgageGuy has some very good advise for you.

However, I can't seem to get the point of obtaining a 40-year term when you have no intention of keeping the property for a long period of time.

Like what MortgageGuy said, lenders will adjust your rate (higher) when you request for 40-year amortization, specially on a second home or investment property, not considering what type of documentation you will apply for (full doc, stated, no ratio, no doc).

With the information you provided, I can see you gaining more benefits in qualifying or applying for a pay-option ARM or an interest-only program - depending on what you really want to achieve or what your plans are. In both of these programs, there's no need for a 40-year term since your monthly payment will not be calculated based on 40 years but on an annual (accrual) rate.

Should you decide on an interest-only program, there are programs out there available for 2, 3, 5, 7 and 10-years interest only payments. This will provide you with more peace of mind.

I hope this helps.

Answer 2

I love how people uneducated in the mortgage industry like to answer questions with their opinions...

There is such thing as a 40year loan (as you already know), there are even 50 year loans, (just not on an investment)

Your best bet is working with a specialized lender... What i mean by specialized is someone that lends outside of fannie mae, and freddie mac guidelines, (conforming)..

The reason is, these companies may offfer a 40 year term, but.. you have to pay a hogher rate of interest, and it has hard qualifications...

Now with a specialized lender, you can get a 40 year loan with just as easily as a 30 year loan, and you get the same rate as on a 30 year as well...

There are many different "TYPES" of specialized lenders out there though...

Some focus mainly on bad credit, some with niche products (sucha as 40 year, investments, interest only, etc) Others deal with bankruptcy and foreclosure...

I suggest that you find a broker that has access to ALL of these types of specialized lenders...

For instance, i work with Providential Bancorp.. We are partnered with over 50 lenders ALL having different programs to offer... Including specialized lending, conforming and nonconforming, and any other type of mortgage loan you can think of...

WHat i do is take your particular loan situation, and shop for programs among my investors... Whoever comes back with the best offer (and believe me they compete), thats the investor we would use...

Now the first question ill ask you when you call me is do you want to pay proncipal over the period of time before you sell this property, or do you just want to have the LOWEST PAYMENT IN THAT TIME???

If you want the lower payment, i will suggest you look into a option arm program..

This program was actually specifically desinged for investors that purchase investment properties to either rent out, or sell for a sale...

What the program does is give you 3 motnhly payment options each month...

For instance, a regular mortgage payment is principal and interest...

On an option arm, you have the choice to pay the full principal and interest, interest only, and also MINIMUM PAYMENT!!!

So picture a mortgage payment that is $2,000 (principal and interest) the interest only would be roughly $1780, and the MINIMUM PAYMENT WOULD ONLY BE $1100!!!!!

This allows you to save over $900 on a monthly basis because you arent required to pay all of the interest DUE each month... Instead, if you ONLY MAKE THE MINIMUM PAYMENT EVERY MONTH, the interest you arent covering gets added to your loan at the end of the year...

So, if you plan to sell in a 2 year period anyways, you can get by making a MUCH less payment over the next couple years until you sell..

I dont know if youve heard of this type of loan before, but it is what i suggest to ANYONE that is in a situation similar to yours...

My name is Jason Fry, and i am a licensed mortgage loan officer..

I post responses here not only to gain business, but because i know that if you are asking a question here, that you dont have a broker that can answer it correctly and you genuinely need help...

I have been a loan officer for 9 years, so what better way to get an a nswer then to work with someone who does this for a living, and is licensed in almost every state to originate mortgage loans...

Do your due dilligence and take a look at our website before calling me if you choose..

Again the company is Providential Bancorp, the website is www.providential.com

You can feel free to reach me directly at 312-264-6448, or email me at [e-mail]

Good luck which ever route you choose!

Thanks,

Jason Fry
Licensed Mortgage Loan Officer
Providential Bancorp
312-264-6448

Answer 3

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Answer 4

Loans for residential properties are usually amortized at a max of 30-years....there is no such thing as a 40-year loan.

Answer 5

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Answer 6

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