Is it a good rate for a commercial property ?

[Marita Jojo]

I am buying a multiunit rental and the rate I am getting is “ the rate will be calculated 5 business days prior to closing and will be fixed for 5 years at a rate of 275 basis points over corresponding federal reserve statistical release H.15 five year treasury constants maturity with a floor of 4.5%. An indicative fixed rate based on the index and floor as of trust would be 4.5%. After the initial 5 years the rate will be reset for additional 5 years based on a fixed rate of 275 basis points over the corresponding federal reserve statistical release H.15 five year treasury contract maturity available at that time with a floor of 4.50%. “

There is also 1% loan commitment fee and $500 documentation fee.

Please guide if it is something to agree or keep looking further ?

[Carter Crowley]

@Marita that all seems pretty standard for a commercial loan. We just locked one in for 5.25% for 5 on a smaller multiunit

Our lender was at prime + 1%

[Marita Jojo]

@Carter Crowley good to know that thanks

[Stephanie P.]

Originally posted by @Marita Jojo:

I am buying a multiunit rental and the rate I am getting is “ the rate will be calculated 5 business days prior to closing and will be fixed for 5 years at a rate of 275 basis points over corresponding federal reserve statistical release H.15 five year treasury constants maturity with a floor of 4.5%. An indicative fixed rate based on the index and floor as of trust would be 4.5%. After the initial 5 years the rate will be reset for additional 5 years based on a fixed rate of 275 basis points over the corresponding federal reserve statistical release H.15 five year treasury contract maturity available at that time with a floor of 4.50%. “

There is also 1% loan commitment fee and $500 documentation fee.

Please guide if it is something to agree or keep looking further ?

That's about right for a full doc loan, although we're seeing no income verification loans in the 5's on 30 year fixed (with no commitment fee).

If you're going to keep the property for a while, you may want to lock something in longer.  Rates can really only go up from here.

Stephanie 

[Marita Jojo]

@Stephanie P. Thanks for this information !