Loan Terms Help for first Commercial Mortgage College Station, TX

[Cody Begg]

BP,

I am consolidating a loan on 4 properties to 1 commercial loan.  (Need to get them out of seller financing deals and want to make room form more conventional mortgages)  I have been proposed the following deal and need help considering it.  The opportunity is to reduce some interest rates and to consolidate 4 properties into 1 loan if that is a good idea but it is also to develop a banking relationship for long term growth.  Thoughts?

Principal Balance: $385,000

Rate: Prime + .75% floating, with a floor of 4.75% and a cap of 7%

Term: 20-year amortization, with a balloon in 5 years. With an option to extend at prime + .50% for another five years if there has been no monetary or technical default of the loan.

Fee: .50% origination fee

Release Provision: If any property is sold the remaining properties must equal a 70% LTV ratio, of the loan.

Appraisal fee to be paid by the borrower of all the properties.

Legal Fees paid by the borrower along with title insurance and associated fees.

Borrower will open up a commercial account for all of the rents to be deposited into, and has agreed to have the payment auto debit out of the account on a monthly basis.