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Cash-Out Refinance: $5,000,000 and Below
There are 14 different loan programs to pick from. The following are just general terms.
- Property Type - Multifamily with 5 or more units office, retail, office/warehouse, industrial
- Ineligible Property - No rehab, turnarounds or handyman specials
- Transaction - Cash out
- Ownership - Most entities, corporation, LLC, LLP or individuals
- Credit - borrower must have "A" credit; no mortgage lates
- Loan Amount - $500,000 to $5,000,000
- Loan-to-Value - Refinance: Cash out 75% LTV
- Second Mortgage - Second mortgages not allowed
- Amortization & Terms - Up to 30 years amortized. Initial fixed for a period of 3 years, 5 years, 7 years, 10 years, 15 years and 30 years
- Interest - 1% annual; 6% lifetime
- Rate Lock - at time of submission (at time of registration for 60 days with deposit of $500 which will be credited at close)
- Escrow - Depends on loan program selected
- Recourse - Depends on loan program selected
- Seasoning - Generally do not allow refinancing during the first 6 months of ownership
- Appraisal - The appraiser must be state-licensed
- Survey - Survey required if not otherwise satisfactory to Title Company
- Inspection - Depends on loan program selected
- Environmental - Depends on loan program selected
- Title Insurance - ALTA lender's title insurance satisfactory to lender
- Termite - Depends on loan program selected
- Other Cost - The borrower will be responsible for paying all costs associated with the transaction including, but not limited to: appraisal, survey, title insurance, credit reports, property condition inspection, flood insurance and legal fees if required.
- DSCR (Debt Service Coverage Ratio) - 1.20:1. Determined by dividing actual NOI by Debt Service (PI). This is the minimum acceptable. Some loans will require higher DSCR.
- NOI (Net Operating Income) - This is the net profit after all property related expenses have ben paid excluding the debt service payment (mortgage PI payment).
- Vacancy - Market
- Management - Use greater of, market or 5% of EGI as a management fee expense for underwriting
- Replacement Reserves - As a minimum use $150-$200 per unit for any replacement reserve for underwriting. (Can be adjusted downward if operating statements show repairs and maintenance items)
- Assumable - Qualifying assumptions with a 1% fee
- Pre-payent Penalty - Depends on loan program selected
Cash-Out Refinance: $5,000,000 and Above
There are 14 different loan programs to pick from. The following are just general terms.
- Property Type - Multifamily, office, retail, office/warehouse, industrial
- Ineligible Property - No rehab, turnarounds or handyman specials
- Transaction - Cash out
- Ownership - Most entities, corporation, LLC, LLP or individuals
- Credit - borrower must have "A" credit; no mortgage lates
- Loan Amount - $5,000,000 and above
- Loan-to-Value - Refinance: Cash out 75% LTV
- Second Mortgage - Second mortgages not allowed
- Amortization & Terms - Up to 30 years amortized. Initial fixed for a period of 3 years, 5 years, 7 years, 10 years, 15 years and 30 years
- Rate Lock - at time of submission (at time of registration for 90 days with deposit of 1% to 2% of loan amount which will be credited at close)
- Escrow - Depends on loan program selected
- Recourse- Depends on loan program selected
- Seasoning - Generally do not allow refinancing during the first 12 months of ownership
- Appraisal - The appraiser must be state-licensed
- Survey - Survey required if not otherwise satisfactory to Title Company
- Inspection - Depends on loan program selected
- Environmental - Depends on loan program selected
- Title Insurance - ALTA lender's title insurance satisfactory to lender
- Termite - Depends on loan program selected
- Other Cost - The borrower will be responsible for paying all costs associated with the transaction including, but not limited to: appraisal, survey, title insurance, credit reports, property condition inspection, flood insurance and legal fees if required.
- DSCR (Debt Service Coverage Ratio) - 1.20:1. Determined by dividing actual NOI by Debt Service (PI). This is the minimum acceptable. Some loans will require higher DSCR.
- NOI (Net Operating Income) - This is the net profit after all property related expenses have ben paid excluding the debt service payment (mortgage PI payment).
- Vacancy - Market
- Management - Use greater of, market or 5% of EGI as a management fee expense for underwriting
- Replacement Reserves - As a minimum use $150-$250 per unit for any replacement reserve for underwriting. (Can be adjusted downward if operating statements show repairs and maintenance items)
- Assumable - Qualifying assumptions with a 1% fee
- Pre-payent Penalty - Depends on loan program selected
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