commercial loan rates - Posted by Marc in MA

Posted by Marc on April 12, 2007 at 10:08:49:

OK thanks for the information. I am trying to project expenses on different properties I am looking at. Interest rates make up a big part of the equation.


commercial loan rates - Posted by Marc in MA

Posted by Marc in MA on April 10, 2007 at 08:26:33:

I am looking at a 6-unit apartment builidng in MA, asking $725K, I would be looking for a loan of about $550K. I am finding it hard to pin down what kind of terms I might get from a lender, previously I had seen something like 8.3%, 15 years for this type of investment.

Can anyone give me a ballpark estimate of what I might expect for a commercial loan these days. My own credit is excellent, in case this makes any difference with the lender. Are commercial terms negotiatiable or pretty much set in stone?



Re: commercial loan rates - Posted by Jim B

Posted by Jim B on June 03, 2007 at 16:16:36:

If you are still interested in financing for this purchase, please contact me. We have an excellent program. And yes, your personal credit makes a big difference to certain of our programs.

Jim B

Re: commercial loan rates - Posted by Patrick S. Lawson

Posted by Patrick S. Lawson on April 11, 2007 at 11:27:21:

There are lots of variables, but with that loan amount and property type in the ideal situation you are looking at rates between 6.125% and 6.750% on a 10 year loan amortized over 30 years (like a 30 year fixed with a 10 balloon).

Re: commercial loan rates - Posted by Benjamine

Posted by Benjamine on April 10, 2007 at 15:58:22:

Commercial loans are in many ways so different from what most people are use to dealing with, that it would take some time to explain the differences.

Here are a few points and comments listed in somewhat random order.

Most long term commercial loans are based on the 10 year Treasury yield which is currently around 4.73%.

According to the property type and the details for which you need a loan, there is a margin added to this Rate to come up with your loan rate.

For normal commercial lenders and loans, 1-2% over the 10 year Treasury Yield might be a good guess of what rate you might pay. However, in the commercial world where loans are in the millions. tens of millions or more… most lenders do not participate in loans of less than $1,000,000.

There are many lenders and banks that will lend less than $1,000,000, but the rates are usually higher than those offered by the large commercial lenders for the $1,000,000 plus loans.

Many lenders that will do loans less than $1,000,000, will not go less than $500,000. Therefore commercial loans less than this amount might show significant rate differences than what might be considered a traditional commercial loan.

One thing that is helpful, is that these lenders that will do the smaller loans, will usually do longer amortizations than the larger lenders. 30 year amortizations are common and although the interest rate might be higher, the longer amortization might actually offer a lower monthly mortgage payment.

Finally, without knowing more, I would say your 8.3% offer is a good rate for the loan amount you seek, but NOT for a 15 year loan. Yes for a 25 or 30 year loan…

sorry, got to go…
email us if you have additional questions…

Re: commercial loan rates - Posted by Jim B

Posted by Jim B on June 03, 2007 at 19:59:36:

You can reach me at JimBurton1@wlgdirect or 208-283-7990