Updated 20 days ago on . Most recent reply
Refinancing a multifamily
My 24-unit apartment complex loan is due for a rate adjustment in early April this year. By then the remaining balance will be about $950k. NOI is around 135k, although it was about 145k in 2024. My loan terms & Amort: 20 years. Initial rate: 4.25% 5 year fixed, adjusts every 5 years based on 5-yr US Treasury Rate plus 3%. My principal and interest payment for the first 5 years is only $7,222/mo. Lender is a local bank doing business in Western Maryland where my property is located.
I do not need to pull out any equity. I would if rates were lower. I purchased it in 2021 for $1.450 million. It is worth around 1.8 - 1.9 million now.
What is your take on this, given the current rate situation? Can I get anything better than Index PLUS 3%? Should I even shop around for a better rate?
Should I contact my lender now, or should I wait a little further to initiate the rate adjustment process?
Do you think the 5-yr rate is coming down in the next couple of months? If so, what can I do to benefit from such rate drop?
Thank you in advance for your advice!
Most Popular Reply
A 3% spread is pretty hefty. I would comparison shop. There is no advantage to waiting.