Community/Recourse Bank Debt


#1

Any of you with small/local community bank debt should reach out to your bankers. Was able to shave off 0.35% off this latest move (to 4.4%) without doing anything… Just a signature for terms revision. No fees, nonsense, etc. Obviously make them aware of competitive dynamic and several other banks looking to refi/recap property/portfolio. This is a good example of some of the benefits of recourse debt. You continue to be fixed (cap) but have a free option on the floating side in the event things move in your favor.


#2

Good to know. Is this something you do when rates decrease?


#3

Thank you for sharing your experience!

So if I’m understanding correctly you went to your bank and suggested/stated that other banks were looking to refinance your debt, asked for a rate reduction from your current bank, and got it?

Do you mind if I ask how much far you were into the term of your loan?

I have some loans that are 1-2 years into the 5 year term and doing this seems gutsy. Even if I were to refinance with another bank at a much lower rate I likely wouldn’t come out ahead after paying prepayment penalties, which I’d assume my current bank would know.


#4

Both sub 1.5 years into 5 year lock. No prepayment penalties.


#5

What state or part of the country?


#6

Upper midwest

Some like to use this FHLB 5 year +200-250

I always put my foot down and refused to be tied to prime

https://www.fhlbdm.com/products-services/advances/


#7

I don’t think I’ve ever even gotten a loan offer that had a zero prepayment penalty. Is this a regular thing that other investors have on their loans?