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Author Topic: Max LTV for commercial financing??  (Read 16026 times)

Offline AaronSanDiego

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Re:Max LTV for commercial financing??
« Reply #15 on: May 09, 2006, 03:35:56 pm »
really the only thing attractive is the rate and if you think about it, you could take that $15,000 that they charge in closing costs and pay discount points to buy down the rate from a regular commercial lender.

Oh and conduits are non-recourse as well so thats attractive to some people. There are plenty of conduit lenders tho so people are using them and they must be doing something to stay in business. I usually tell people to run the other way tho.
Residential to $20.0 million
Construction   :   Commercial
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Offline christopher w

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Re:Max LTV for commercial financing??
« Reply #16 on: May 09, 2006, 03:59:02 pm »
what is "defeasance"?
Christopher W
C-214.923.5781

Offline 4EEM

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Re:Max LTV for commercial financing??
« Reply #17 on: May 09, 2006, 03:59:54 pm »
I've seen a few conduits that probably won't be around to much longer and a fee that offer real value....column financial being one of them.

For instance:  I recently closed a retail refi.  where the portfolio lender was offering a rate of 7% on a 10 year arm amortized over 30 with a bullet in the 15th year.  Column offered 6.575% amortized over 30 with a 10 year bullet.  Columns fees were only 6k more.  The client did not like the idea of an adjusting rate after year 10 and did like the over 200/month savings with the conduit.  The additional closing costs will be paid off in the next 24 months...after that the borrower will save over $20,000 before year 10.



Patrick S. Lawson
Highland Lending, Inc.
Phone  (407) 877-0093
Fax      (866) 476-1133

Offline 4EEM

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Re:Max LTV for commercial financing??
« Reply #18 on: May 09, 2006, 04:06:21 pm »
instead of having a fixed pre-payment penalty the borrower must replace the "cash flow" the investor would recieve by paying what it will cost to buy enough bonds to replace the cash flow.  It's expensive...third party fees are often in excess of 50k not to mention the purchase price of the bonds (if bond prices have risen since securitization of mortgage)....if bond prices have droped signifigantly since the securitization of the mortgage there is the posibily of a "discount" on the principal balance refund...in other words it could in theory work out for the borrower.  

Check out "defeasance calculators" in google.
Patrick S. Lawson
Highland Lending, Inc.
Phone  (407) 877-0093
Fax      (866) 476-1133

Offline christopher w

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Re:Max LTV for commercial financing??
« Reply #19 on: May 09, 2006, 04:22:23 pm »
Man that is some complicated stuff. How long have you been doing commercial loans?
Christopher W
C-214.923.5781

Offline AaronSanDiego

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Re:Max LTV for commercial financing??
« Reply #20 on: May 09, 2006, 04:49:14 pm »
Here's a good article that explains deafeasance and yield maintenance.

http://www.findarticles.com/p/articles/mi_qa3681/is_200107/ai_n8953948/pg_2
Residential to $20.0 million
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Offline amusedtwinkle

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Re:Max LTV for commercial financing??
« Reply #21 on: May 10, 2006, 03:12:35 pm »
Hi all, what you all have said is very interesting...because I have a lender that will do a 90% loan no problem no conduits or anything...of course you have to have good credit (at least 680 FICO)  and loan must be above 100,000 up to 1.2 Million also property must be able to carry itself of purchaser must prove ability to carry....loans close in 30-45 days.... a variety of ammortorizations available...interest rate between 10-11% rates aren't the best but could be worse....

You all are probably saying....SURE what's the catch....no catch....
« Last Edit: May 10, 2006, 03:16:21 pm by amusedtwinkle »
Please feel free to contact me. Thank You
Joleen Larsen
Bridge Capital
661 940-3070
[email protected]

Offline AaronSanDiego

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Re:Max LTV for commercial financing??
« Reply #22 on: May 10, 2006, 03:26:42 pm »
yeah there are several lenders doing those...but there is only one that buys all that paper.
Residential to $20.0 million
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Offline Mortgage Mark

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Re:Max LTV for commercial financing??
« Reply #23 on: May 11, 2006, 10:17:40 am »
You have to consider the loan amount when asking this question.  

90% is doable near 10%, even a little lower with excellent credit.   And this is on a stated loan


I didn't read all the posts, this is a long forum, but if I'm wrong tell me.  Ill look through my stack of companies to find who it is that offers this, but I know it's available.
Mark Forsyth
Sterling Mortgage Group
[email protected]
916-760-8834

Offline 4EEM

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Re:Max LTV for commercial financing??
« Reply #24 on: May 11, 2006, 11:48:21 am »
90% is easy.  Getting a good rate is not.  A borrower can get 90% on a million dollar loan, but the rate is going to be ugly.  If they want a better rate they are going to have do 90% on a "multi-million dollar" property.  There is a big difference between a 10% DP @ 100K vs. a 10% DP a 500K.

I have yet to see a 90% small balance loan with a rate under 10% and a fixed term over 5 years.
Patrick S. Lawson
Highland Lending, Inc.
Phone  (407) 877-0093
Fax      (866) 476-1133

Offline silverhilljohn

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Re:Max LTV for commercial financing??
« Reply #25 on: May 11, 2006, 04:36:51 pm »
How about 90% for 5% interest rate (you all know I am kidding)  Everyone wants everything for nothing, we need to be realistic.  

Through residential brokers, Silver Hill Financial offers 90 % LTV on Tier 1 and Tier 2 property types for strong borrowers seeking loans from $100k to $1,500,000.  Will the rates be in the 10's or 11's for 90%, YES THEY WILL, sorry.    

The Silver Hill program features competitive pricing, long terms and high LTVs.  We finance up to 90% LTV on multifamily, mixed-use, warehouse, self storage, retail, office, bed & breakfast, light industrial and mobile home park properties with 30 year terms on all qualifying property types.

Call Al H at 630-303-8834 and have him connect with me.  He is Chicago based, but will write a commercial deal across the country, we can close locally.  Our loans do not have balloons associated with them, we amortize 15-20-and 30 years (which provides for very good cash flow to the intelligent investor, even in the 10's)  Our lower LTV loan rates have been lowered to be more bank competitive.  Al is a mortgage broker of mine that is as reasonable as I have seen, his fee is almost always under 1%, and SHF only charge $500 to close a loan.  Very few surprises with us.  

Offline 4EEM

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Re:Max LTV for commercial financing??
« Reply #26 on: May 12, 2006, 08:30:44 am »
Silverhill is better than say....Velocity, but there are other lenders with much favorable rates on 90% who do not have a 10% prepay.
Patrick S. Lawson
Highland Lending, Inc.
Phone  (407) 877-0093
Fax      (866) 476-1133

Offline silverhilljohn

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Re:Max LTV for commercial financing??
« Reply #27 on: May 12, 2006, 08:42:12 am »
Who says we have a 10% prepay?  Our standard is 5% for 5 years, even on our fixed rate program(which actually declines .5% every five years).  We can get our pre pay down to 3 years.  As noted, we have virtually no fees to do a loan on the front.  Are we perfect for every deal, heck no, but we do offer a solid program for a large number of borrowers.  All we say is get all the details of these lower rate programs and compare the entire deal.  We do DTI and/or DSCR underwriting, if a property is break even or making just a few percent profit, find another borrower that will get the deal done based on personal DTI and let me know about it.    

Offline silverhilljohn

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Re:Max LTV for commercial financing??
« Reply #28 on: May 12, 2006, 08:44:14 am »
I meant to say find another Lender, not borrower above, Sorry.

Offline 4EEM

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Re:Max LTV for commercial financing??
« Reply #29 on: May 12, 2006, 08:46:57 am »
Your right....I just checked...the prepay is only 5% now.  Last time I tried to run a deal with Silverhill there was a 10,9,8,....
Patrick S. Lawson
Highland Lending, Inc.
Phone  (407) 877-0093
Fax      (866) 476-1133

 




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