I have a lender lined up to provide me with 46k loan/line of credit on a 60k home. The loan is fixed for 5 year at 6.5% then it becomes adjustable to 1% above prime. The loan’s closing costs are $700.
The bank is unwilling to give me a fixed rate mortgage on a rental. I talked with another bank and they are unwilling to give a mortgage on a rental owned by an LLC.
I am not sure what I will do in 5 or 7 years with this property. Maybe I will sell it or keep it. I feel the fixed rate mortgage will give me more options. If interest rates are at 10%, I would keep it. If interest rates are low I may reinvest in something else.
What do you folks think. Should I try and get a fixed rate mortgage? Can I get a fixed rate mortgage on this type of property?
My LLC has commercial loans on all of the properties. They’re fixed for 5 yrs and amortized over 10 yrs. I’m paying extra on the mortgages and hope to have the properties paid off in five years vice ten. Interest rates can pretty much only go up from here so if you’re worried they’ll be sky high, you may want to try for a fixed rate. I just couldn’t get anyone to offer me anything besides fixed for 3 or 5 yrs so I’m working w/ what I’ve got. My guess is you’ll have a very hard time finding someone to go out 20 or 30 yrs fixed on a NOO property in an LLC.
The only deal I can find is a local bank to lend me money on a home I already own. Basically it is a line of credit. I like it but wish I could find a fixed rate long term loan. Have you had a problem mortgaging more than 4 or 5 properties. Are the folks that are providing you a commercial loan for the llc local or nationwide? If they are nationwide, can you tell me who?
By using commercial loans, I am not limited to the conventional loan limitations currently in place. The only limit to commercial loans is the comfort level of the bank (as long as you can come up with the required down payments for the loans). The bank I deal with is local to me. I talked to the bank president from the beginning and am fortunate he gave me a chance.
Hi BBGM,
I just wanted to do the humane thing here and mention that collaterlizing a primary res is generally considered to be an extremely risky proposition. If its not your primary res and is NOO then you are simply back to searching out your best case. Best of luck.
I want to get a loan from the bank but i am still confused about the loan type.I want to take loan for building a plaza so what should it be called ? loan for residential friends or for commercial purposes .Please direct me as soon as possible.I have to complete my documentation.You can share any other legal advice with me too.