Recent Mortgage Terms - Local Banks


#1

I’m currently mortgage shopping for a park with a contract price of just under $1 million. Here are some of the more competitive terms that I’m seeing from local banks:
LTV: 75%
Rate: 5.25
Term: 5 year balloon
Amortization: 20 years
No origination fee.

I’m hoping to get the rate down to 5.125. The WSJ prime rate is 5.0 now. Has anyone seen comparable terms? Also curious about whether anyone has been able to extend the term to 7 or 10 years, and at what rate. Thanks!


#2

Good terms. I would entertain that loan.


#3

In my limited experience those are very good terms right now for a local bank. After a lot of haggling with local banks i just got the following on a $1.2 million purchase:

LTV: 65%
Rate: 5.25
Term: 5 year balloon
Amortization: 20 years
half a point origination

The initial terms I got from everyone were the same as the above but with rates closer to 5.75


#4

Can you please tell me what banks are you using? The terms I recently got on a park sound terrible compared to yours:

25% down
5 year fixed at 6%
15 year amortization


#5

I’m getting
Ltv 20% down
5.625%
20 year
5 year balloon
Hope to close next week


#6

See if you have any federal credit unions in your area that do commercial real estate loans. They are sometimes more competitive than your local banks. Make sure they have a history of loaning on parks.


#7

DAM_MHP, I’ll PM you. If you’re outside of my region, the banks that I contacted likely won’t be of much use. The only fund local deals.

I shopped very hard for these rates. I started by visiting my state’s banking association that lists banks operating by county. In total I called around 20 community and independent banks. I asked detailed questions about how they calculate rates.

A couple of bankers were bold enough to tell me, “We set our rates based on what area competing banks are offering.” Then I told them they were a 1/2 point over the competition. Some simply didn’t know or were unable to explain. The more knowledgeable ones told me that their rates were based on a benchmark such as the WSJ prime or 10 year T-bill plus a certain number of basis points.

Everything is negotiable, from the rate to the origination fee. It may depend on how hungry the bankers are in your market. Call as many as you are able to, educate yourself, and make them compete for your business. In the end they will respect you and see you as someone who interested in making a good business decision. This is the type of person they want to lend to.


#8

@Matt223 - Those are good terms. I am getting similar but my interest has been higher (5.5 and 5.74%) on the last two transactions I have done. I haven’t seen anything lower esp with no origination fee (0.5% to 1%) What bank is it?


#9

Kurof, do you mind sharing who your lender is? I’m in the process of looking for a loan and would prefer to only put 20% down on this particular deal. you can PM me.