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
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…
yeah there are several lenders doing those…but there is only one that buys all that paper.
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.
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.
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.
Silverhill is better than say…Velocity, but there are other lenders with much favorable rates on 90% who do not have a 10% prepay.
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.
I meant to say find another Lender, not borrower above, Sorry.
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,…
We got rid of the declining pre-pay on the long term fixed loan, boosted our max loan amount to $1.5M, offering 85% LTV with A- credit, giving a reduction for lower LTV deals with A credit and good DSCR, giving 80% 30 amortizations on Tier 3 properties, and 75% 30yr ams on Tier 4 properties. No defeasance, no yield maintenance, I believe it is a straight forward program. We are not built for the buy/fix/flip 6 months later borrower, our focus is on moderate long term positive cash flow investors that may way to purchase more than one property, thus the 10% down. When our brokers understand the products, the market to the correct investors, the results are very good. When we see a borrower that is only hunting for the best rate and does not look at the entire scenario, we watch lots of train wrecks occur.