No. of Recommendations: 1
Hi Footie,

Any suggestions on mortgages, rates,
Assuming, since you are going into the rental business intentionally with eyes wide open, that this is a firm and stable long term business building decision....
I recommend the least investor-program down payment (20%,) on a 30 FRM, buying the interest rate down with closing discount points of 1-2%, and paying all closing costs (including originator compensation) separately in closing cash (not paid internally from rebate of a higher than otherwise available rate.)

The short points are;
1) as little cash into the equity as possible,
2) as low of a permanent a rate as can be bought

recommendations on mortgage companies, etc.?
The company is 1,000% irrelevant... the competency of the loan officer is everything. That's your shopping list, in a nutshell; Find the respect-worthy mortgage pro... even if they appear to cost a premium compensation ('appear' being the operative word) the consequences of their expertise will usually create far better net worth results for you, long term.

We have great credit and our primary residence is paid for. Thanks.
In that case, 1st thing you should do is take an up-to 90% LTV (or combined LTV, if a tophat HELOC can be set up to 90%) cash-out loan on your primary residence. That cash will be much cheaper than anything you can borrow against the investment property.

Don't do the mental game of segmentation.... Getting unecessarily cute with your bookeeping can dearly cost you in net worth, and delayed financial freedom/retirement.
A) Focus on the bottom line of your total aggregate balance sheet,
B) Accumulate cash to eliminate debt on *YOUR* balance sheet... don't forfeit your cash to in order to eliminate your debt on the BANKER'S balance sheet. *CONTROL OF CASH* is King!

Dave Donhoff
Leverage Planner
Print the post  


Useful Resources
Our Home Center has all you need to make buying and owning a home a great experience. Get or refinance a mortgage and much more!
Buying/Selling a Home FAQ

Mortgage Professor
Offsite resource for mortgage questions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.