LLC loan interest rates over the last 5 years and refinancing
New to Real Estate · Member since 2024 · 1 post · 1 vote
LLC loan interest rates over the last 5 years and refinancing
Most Popular Reply
12 Penns Trail Suite 138 Newtown, PA 18940 · Member since 2023 · 1k+ posts · 319 votes
2yI am 150% positive that for business purpose investment property DSCR loan or anytime of business purpose non qm investment loan in the state of PA for the year 2024 hte minimum loan amount to have a prepay is 312k . If it is a primary you can never have a prepay no matter what the loan amount is .
Below is a list of the states and their requirements for prepay
AL Alabama Yes No restrictions None Refinance or sale
AK Alaska No N/A N/A N/A
AR Arkansas Yes No restrictions None Refinance or sale
AZ Arizona Yes No restrictions None Refinance or sale
CA California Yes No restrictions None Refinance or sale
CO Colorado Yes No restrictions None Refinance or sale
CT Connecticut Yes No restrictions None Refinance or sale
DC District of Columbia Yes 2 months interest on prepaid amt that exceeds 1/3 of
original UPB
36 Months Refinance or sale
DE Delaware Yes No restrictions None Refinance or sale
FL Florida Yes No restrictions None Refinance or sale
GA Georgia Yes No restrictions None Refinance or sale
HI Hawaii Yes No restrictions None Refinance or sale
IA Iowa Yes No restrictions None Refinance or sale
ID Idaho Yes No restrictions None Refinance or sale
IL Illinois Yes No restrictions None Refinance or sale Borrower must be corporation if
interest rate is > 8%
IN Indiana Yes No restrictions None Refinance or sale
KS Kansas Yes No restrictions 6 months Refinance or sale
KY Kentucky Yes No restrictions None Refinance or sale
LA Louisiana Yes No restrictions None Refinance or sale
MA Massachusetts Yes No restrictions 36 Months Refinance or sale
MD Maryland Yes No restrictions 36 Months Refinance or sale
ME Maine Yes No restrictions None Refinance or sale
MI Michigan Yes 1% of amount prepaid 36 Months Refinance or sale
MN Minnesota Yes Lesser of (i) 2% of UPB or (ii) 60 days of interest 42 Months Refinance only PPP restrictions only apply to loans
within conforming limits
MO Missouri Yes No restrictions None Refinance or sale
MS Mississippi Yes 5% of UPB if prepaid in months 1-12
4% of UPB if prepaid in months 13-24
3% of UPB if prepaid in months 25-36
2% of UPB if prepaid in months 37-48
1% of UPB if prepaid in months 49-60
60 Months Refinance or sale
MT Montana Yes No restrictions None Refinance or sale
NC North Carolina Yes No restrictions None Refinance or sale
ND North Dakota Yes No restrictions None Refinance or sale
NE Nebraska Yes No restrictions None Refinance or sale
NH New Hampshire Yes No restrictions Refinance or sale
NJ New Jersey Yes No restrictions None Refinance or sale Borrower must be corporation if
interest rate is > 6%
NM New Mexico No N/A N/A N/A
NV Nevada Yes No restrictions None Refinance or sale
NY New York Yes No restrictions None Refinance or sale
OH Ohio Yes 1% of original UPB 60 Months Refinance or sale
OK Oklahoma Yes No restrictions None Refinance or sale
OR Oregon Yes No restrictions None Refinance or sale
PA Pennsylvania Yes No restrictions None Refinance or sale Not permitted for loans less than base
amount ($312,178)
RI Rhode Island Yes 1-4 Purchase: 2% during first year only.
Otherwise, no restrictions
Purchase: 12 months
Refinance: 60 months
SC South Carolina Yes No restrictions None Refinance or sale
SD South Dakota Yes No restrictions None Refinance or sale
TN Tennessee Yes No restrictions None Refinance or sale
TX Texas Yes No restrictions None Refinance or sale
UT Utah Yes No restrictions None Refinance or sale
VA Virginia Yes No restrictions None Refinance or sale
VT Vermont No N/A N/A N/A
WA Washington Yes No restrictions PPP on ARM cannot extend
beyond 60 days prior to the
initial rate change date
Refinance or sale
WI Wisconsin Yes No restrictions None Refinance or sale No PPP permitted on ARMS
WV West Virginia Yes No restrictions None Refinance or sale
WY Wyoming Yes No restrictions None Refinance or sale
19 Replies
- Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes2y
@Jacqueline Ho, not true. I have rates for mortgages under my LLC's name under 4% from loans I took out a few years ago.
I'm also surprised they aren't requiring both LLC members (owners) to personally guarantee the loan.
BRRRR's can work with any interest rate, obviously harder to see good cash-flow right off the bat with rates where they are BUT in the foreseeable future you could refinance to a lower rate. To that end, I might focus on any prepayment penalties the loan you take out has. I would gladly pay a little more interest now for the right to refinance without penalty.
- Lender · Charlotte, NC · Member since 2020 · 224 posts · 221 votes2y
Hey Jacqueline,
Sounds like you are talking about a DSCR or Commercial Loan and vesting in your LLC. Pretty common practice here. DSCR loans do have slightly higher rates than conventional loans, but its not because of the LLC, its because of how they qualify the client (not using personal income).
Rates will decrease on ALL loans once rates actually decrease in general. It's due to market data and inflation. You used to be able to get rates in the 4-5% ranges, but now they are in the 7-8% range due to an increase in inflation.
Pricing can also depend on if you have Prepayment Penalties (or not) and credit scores of the guarantors.
Great Question!
- Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes2y
@Jacqueline Ho Similar to the other posts above, my commercial rates were in the 4% range back in 2020 - 2021 before rates started increasing.
- 12 Penns Trail Suite 138 Newtown, PA 18940 · Member since 2023 · 1k+ posts · 319 votes2y
Yes this is 100% accurate. Also in PA can't have a prepay if loan amount is less than 312k so that can drive the pricing up . What is your scenario looking like ?
- Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes2y
Quote from @Jacob Sherman:
Yes this is 100% accurate. Also in PA can't have a prepay if loan amount is less than 312k so that can drive the pricing up . What is your scenario looking like ?
Where is that in the law? I have loans in PA under that amount with prepayment penalties. - 2yStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
@Jacqueline Ho Rates fluctuate, even when the borrowers own their real estate in an LLC. By of example, in April of 2022 I refinanced some newly built housing units at a 5.25% rate. If I happened to seek the same refinance a few months earlier, the rate would have been even lower. Meanwhile I originated a refinance loan in July of 2023 on a nearly identically built housing product and the rate was 6.66%. I am not sure where the pricing is today as all of my recently originated debt is construction financing which is adjustable and tied to the fed rate but your broker is not being honest with you if they are saying rates never drop below 7%.
As for your desire to complete a BRRRR, the interest rates certainly impact the debt coverage ratio and thus the refinance proceeds. In many cases the DCR is limiting refinances to lower LTV's. I always advise investors to be mindful of why they are so focused on the BRRRR strategy. I say this because many place greater significance on whether they can receive a return of their capital over other criterion that are far more critical to the properties success. It is easier to complete a BRRRR transaction in North Philadelphia than say Society Hill. I wouldn't equate the north philadelphia investment as being better...but many on these forums would because they are hyper focused on return of capital which in my oppinion is incredibly flawed.
- 12 Penns Trail Suite 138 Newtown, PA 18940 · Member since 2023 · 1k+ posts · 319 votes2y
Quote from @Kevin Sobilo:
Quote from @Jacob Sherman:
Yes this is 100% accurate. Also in PA can't have a prepay if loan amount is less than 312k so that can drive the pricing up . What is your scenario looking like ?
Where is that in the law? I have loans in PA under that amount with prepayment penalties.Please check with your lender . In the state of PA for 2024 its 312k. Last year it was 278k minimum
- 2yAlan AsriantsBusiness MemberReal Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes
Like many said here it sounds like a DSCR loan.
You could get sub 5% a couple of years ago and even close to 4%. 7.75% for a no doc DSCR loan for an LLC is actually pretty good. Conventional primary 5% down on a duplex is not even that much more competitive...
Alan Asriants - New Century Real Estate 590 Reviews - Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes2y
Quote from @Jacob Sherman:
Quote from @Kevin Sobilo:
Quote from @Jacob Sherman:
Yes this is 100% accurate. Also in PA can't have a prepay if loan amount is less than 312k so that can drive the pricing up . What is your scenario looking like ?
Where is that in the law? I have loans in PA under that amount with prepayment penalties.Please check with your lender . In the state of PA for 2024 its 312k. Last year it was 278k minimum
Are you sure that isn't just for a residential loan for a primary residence? Lending rules tend to be different for commercial loans and loans not for primary residences.
Do you know where I can find information about this law?
- 12 Penns Trail Suite 138 Newtown, PA 18940 · Member since 2023 · 1k+ posts · 319 votes2y
I am 150% positive that for business purpose investment property DSCR loan or anytime of business purpose non qm investment loan in the state of PA for the year 2024 hte minimum loan amount to have a prepay is 312k . If it is a primary you can never have a prepay no matter what the loan amount is .
Below is a list of the states and their requirements for prepay
AL Alabama Yes No restrictions None Refinance or sale
AK Alaska No N/A N/A N/A
AR Arkansas Yes No restrictions None Refinance or sale
AZ Arizona Yes No restrictions None Refinance or sale
CA California Yes No restrictions None Refinance or sale
CO Colorado Yes No restrictions None Refinance or sale
CT Connecticut Yes No restrictions None Refinance or sale
DC District of Columbia Yes 2 months interest on prepaid amt that exceeds 1/3 of
original UPB
36 Months Refinance or sale
DE Delaware Yes No restrictions None Refinance or sale
FL Florida Yes No restrictions None Refinance or sale
GA Georgia Yes No restrictions None Refinance or sale
HI Hawaii Yes No restrictions None Refinance or sale
IA Iowa Yes No restrictions None Refinance or sale
ID Idaho Yes No restrictions None Refinance or sale
IL Illinois Yes No restrictions None Refinance or sale Borrower must be corporation if
interest rate is > 8%
IN Indiana Yes No restrictions None Refinance or sale
KS Kansas Yes No restrictions 6 months Refinance or sale
KY Kentucky Yes No restrictions None Refinance or sale
LA Louisiana Yes No restrictions None Refinance or sale
MA Massachusetts Yes No restrictions 36 Months Refinance or sale
MD Maryland Yes No restrictions 36 Months Refinance or sale
ME Maine Yes No restrictions None Refinance or sale
MI Michigan Yes 1% of amount prepaid 36 Months Refinance or sale
MN Minnesota Yes Lesser of (i) 2% of UPB or (ii) 60 days of interest 42 Months Refinance only PPP restrictions only apply to loans
within conforming limits
MO Missouri Yes No restrictions None Refinance or sale
MS Mississippi Yes 5% of UPB if prepaid in months 1-12
4% of UPB if prepaid in months 13-24
3% of UPB if prepaid in months 25-36
2% of UPB if prepaid in months 37-48
1% of UPB if prepaid in months 49-60
60 Months Refinance or sale
MT Montana Yes No restrictions None Refinance or sale
NC North Carolina Yes No restrictions None Refinance or sale
ND North Dakota Yes No restrictions None Refinance or sale
NE Nebraska Yes No restrictions None Refinance or sale
NH New Hampshire Yes No restrictions Refinance or sale
NJ New Jersey Yes No restrictions None Refinance or sale Borrower must be corporation if
interest rate is > 6%
NM New Mexico No N/A N/A N/A
NV Nevada Yes No restrictions None Refinance or sale
NY New York Yes No restrictions None Refinance or sale
OH Ohio Yes 1% of original UPB 60 Months Refinance or sale
OK Oklahoma Yes No restrictions None Refinance or sale
OR Oregon Yes No restrictions None Refinance or sale
PA Pennsylvania Yes No restrictions None Refinance or sale Not permitted for loans less than base
amount ($312,178)
RI Rhode Island Yes 1-4 Purchase: 2% during first year only.
Otherwise, no restrictions
Purchase: 12 months
Refinance: 60 months
SC South Carolina Yes No restrictions None Refinance or sale
SD South Dakota Yes No restrictions None Refinance or sale
TN Tennessee Yes No restrictions None Refinance or sale
TX Texas Yes No restrictions None Refinance or sale
UT Utah Yes No restrictions None Refinance or sale
VA Virginia Yes No restrictions None Refinance or sale
VT Vermont No N/A N/A N/A
WA Washington Yes No restrictions PPP on ARM cannot extend
beyond 60 days prior to the
initial rate change date
Refinance or sale
WI Wisconsin Yes No restrictions None Refinance or sale No PPP permitted on ARMS
WV West Virginia Yes No restrictions None Refinance or sale
WY Wyoming Yes No restrictions None Refinance or sale - 2yBrittany MinocchiBusiness MemberLender · Massillon, OH · Member since 2022 · 1k+ posts · 486 votes
Quote from @Jacob Sherman:
I am 150% positive that for business purpose investment property DSCR loan or anytime of business purpose non qm investment loan in the state of PA for the year 2024 hte minimum loan amount to have a prepay is 312k . If it is a primary you can never have a prepay no matter what the loan amount is .
Below is a list of the states and their requirements for prepay
AL Alabama Yes No restrictions None Refinance or sale
AK Alaska No N/A N/A N/A
AR Arkansas Yes No restrictions None Refinance or sale
AZ Arizona Yes No restrictions None Refinance or sale
CA California Yes No restrictions None Refinance or sale
CO Colorado Yes No restrictions None Refinance or sale
CT Connecticut Yes No restrictions None Refinance or sale
DC District of Columbia Yes 2 months interest on prepaid amt that exceeds 1/3 of
original UPB
36 Months Refinance or sale
DE Delaware Yes No restrictions None Refinance or sale
FL Florida Yes No restrictions None Refinance or sale
GA Georgia Yes No restrictions None Refinance or sale
HI Hawaii Yes No restrictions None Refinance or sale
IA Iowa Yes No restrictions None Refinance or sale
ID Idaho Yes No restrictions None Refinance or sale
IL Illinois Yes No restrictions None Refinance or sale Borrower must be corporation if
interest rate is > 8%
IN Indiana Yes No restrictions None Refinance or sale
KS Kansas Yes No restrictions 6 months Refinance or sale
KY Kentucky Yes No restrictions None Refinance or sale
LA Louisiana Yes No restrictions None Refinance or sale
MA Massachusetts Yes No restrictions 36 Months Refinance or sale
MD Maryland Yes No restrictions 36 Months Refinance or sale
ME Maine Yes No restrictions None Refinance or sale
MI Michigan Yes 1% of amount prepaid 36 Months Refinance or sale
MN Minnesota Yes Lesser of (i) 2% of UPB or (ii) 60 days of interest 42 Months Refinance only PPP restrictions only apply to loans
within conforming limits
MO Missouri Yes No restrictions None Refinance or sale
MS Mississippi Yes 5% of UPB if prepaid in months 1-12
4% of UPB if prepaid in months 13-24
3% of UPB if prepaid in months 25-36
2% of UPB if prepaid in months 37-48
1% of UPB if prepaid in months 49-60
60 Months Refinance or sale
MT Montana Yes No restrictions None Refinance or sale
NC North Carolina Yes No restrictions None Refinance or sale
ND North Dakota Yes No restrictions None Refinance or sale
NE Nebraska Yes No restrictions None Refinance or sale
NH New Hampshire Yes No restrictions Refinance or sale
NJ New Jersey Yes No restrictions None Refinance or sale Borrower must be corporation if
interest rate is > 6%
NM New Mexico No N/A N/A N/A
NV Nevada Yes No restrictions None Refinance or sale
NY New York Yes No restrictions None Refinance or sale
OH Ohio Yes 1% of original UPB 60 Months Refinance or sale
OK Oklahoma Yes No restrictions None Refinance or sale
OR Oregon Yes No restrictions None Refinance or sale
PA Pennsylvania Yes No restrictions None Refinance or sale Not permitted for loans less than base
amount ($312,178)
RI Rhode Island Yes 1-4 Purchase: 2% during first year only.
Otherwise, no restrictions
Purchase: 12 months
Refinance: 60 months
SC South Carolina Yes No restrictions None Refinance or sale
SD South Dakota Yes No restrictions None Refinance or sale
TN Tennessee Yes No restrictions None Refinance or sale
TX Texas Yes No restrictions None Refinance or sale
UT Utah Yes No restrictions None Refinance or sale
VA Virginia Yes No restrictions None Refinance or sale
VT Vermont No N/A N/A N/A
WA Washington Yes No restrictions PPP on ARM cannot extend
beyond 60 days prior to the
initial rate change date
Refinance or sale
WI Wisconsin Yes No restrictions None Refinance or sale No PPP permitted on ARMS
WV West Virginia Yes No restrictions None Refinance or sale
WY Wyoming Yes No restrictions None Refinance or saleAre you a direct lender or broker? There are rules that sometimes come into play for states like PA and OH, but they aren't uniform across the board from lender to lender in the commercial space. I have brokered loans in these states that include prepayment penalties.
Brittany Minocchi - Barrett Financial Group, LLC522 Reviews - 12 Penns Trail Suite 138 Newtown, PA 18940 · Member since 2023 · 1k+ posts · 319 votes2y
Quote from @Brittany Minocchi:
Quote from @Jacob Sherman:
I am 150% positive that for business purpose investment property DSCR loan or anytime of business purpose non qm investment loan in the state of PA for the year 2024 hte minimum loan amount to have a prepay is 312k . If it is a primary you can never have a prepay no matter what the loan amount is .
Below is a list of the states and their requirements for prepay
AL Alabama Yes No restrictions None Refinance or sale
AK Alaska No N/A N/A N/A
AR Arkansas Yes No restrictions None Refinance or sale
AZ Arizona Yes No restrictions None Refinance or sale
CA California Yes No restrictions None Refinance or sale
CO Colorado Yes No restrictions None Refinance or sale
CT Connecticut Yes No restrictions None Refinance or sale
DC District of Columbia Yes 2 months interest on prepaid amt that exceeds 1/3 of
original UPB
36 Months Refinance or sale
DE Delaware Yes No restrictions None Refinance or sale
FL Florida Yes No restrictions None Refinance or sale
GA Georgia Yes No restrictions None Refinance or sale
HI Hawaii Yes No restrictions None Refinance or sale
IA Iowa Yes No restrictions None Refinance or sale
ID Idaho Yes No restrictions None Refinance or sale
IL Illinois Yes No restrictions None Refinance or sale Borrower must be corporation if
interest rate is > 8%
IN Indiana Yes No restrictions None Refinance or sale
KS Kansas Yes No restrictions 6 months Refinance or sale
KY Kentucky Yes No restrictions None Refinance or sale
LA Louisiana Yes No restrictions None Refinance or sale
MA Massachusetts Yes No restrictions 36 Months Refinance or sale
MD Maryland Yes No restrictions 36 Months Refinance or sale
ME Maine Yes No restrictions None Refinance or sale
MI Michigan Yes 1% of amount prepaid 36 Months Refinance or sale
MN Minnesota Yes Lesser of (i) 2% of UPB or (ii) 60 days of interest 42 Months Refinance only PPP restrictions only apply to loans
within conforming limits
MO Missouri Yes No restrictions None Refinance or sale
MS Mississippi Yes 5% of UPB if prepaid in months 1-12
4% of UPB if prepaid in months 13-24
3% of UPB if prepaid in months 25-36
2% of UPB if prepaid in months 37-48
1% of UPB if prepaid in months 49-60
60 Months Refinance or sale
MT Montana Yes No restrictions None Refinance or sale
NC North Carolina Yes No restrictions None Refinance or sale
ND North Dakota Yes No restrictions None Refinance or sale
NE Nebraska Yes No restrictions None Refinance or sale
NH New Hampshire Yes No restrictions Refinance or sale
NJ New Jersey Yes No restrictions None Refinance or sale Borrower must be corporation if
interest rate is > 6%
NM New Mexico No N/A N/A N/A
NV Nevada Yes No restrictions None Refinance or sale
NY New York Yes No restrictions None Refinance or sale
OH Ohio Yes 1% of original UPB 60 Months Refinance or sale
OK Oklahoma Yes No restrictions None Refinance or sale
OR Oregon Yes No restrictions None Refinance or sale
PA Pennsylvania Yes No restrictions None Refinance or sale Not permitted for loans less than base
amount ($312,178)
RI Rhode Island Yes 1-4 Purchase: 2% during first year only.
Otherwise, no restrictions
Purchase: 12 months
Refinance: 60 months
SC South Carolina Yes No restrictions None Refinance or sale
SD South Dakota Yes No restrictions None Refinance or sale
TN Tennessee Yes No restrictions None Refinance or sale
TX Texas Yes No restrictions None Refinance or sale
UT Utah Yes No restrictions None Refinance or sale
VA Virginia Yes No restrictions None Refinance or sale
VT Vermont No N/A N/A N/A
WA Washington Yes No restrictions PPP on ARM cannot extend
beyond 60 days prior to the
initial rate change date
Refinance or sale
WI Wisconsin Yes No restrictions None Refinance or sale No PPP permitted on ARMS
WV West Virginia Yes No restrictions None Refinance or sale
WY Wyoming Yes No restrictions None Refinance or saleAre you a direct lender or broker? There are rules that sometimes come into play for states like PA and OH, but they aren't uniform across the board from lender to lender in the commercial space. I have brokered loans in these states that include prepayment penalties.
Yes we are a direct lender . Barrett actually brokers a lot of bridge, fix and flip, ground up construction and DSCR . I believe Rich Hauser is your rep
- 2yBrittany MinocchiBusiness MemberLender · Massillon, OH · Member since 2022 · 1k+ posts · 486 votes
Quote from @Jacob Sherman:
Quote from @Brittany Minocchi:
Quote from @Jacob Sherman:
I am 150% positive that for business purpose investment property DSCR loan or anytime of business purpose non qm investment loan in the state of PA for the year 2024 hte minimum loan amount to have a prepay is 312k . If it is a primary you can never have a prepay no matter what the loan amount is .
Below is a list of the states and their requirements for prepay
AL Alabama Yes No restrictions None Refinance or sale
AK Alaska No N/A N/A N/A
AR Arkansas Yes No restrictions None Refinance or sale
AZ Arizona Yes No restrictions None Refinance or sale
CA California Yes No restrictions None Refinance or sale
CO Colorado Yes No restrictions None Refinance or sale
CT Connecticut Yes No restrictions None Refinance or sale
DC District of Columbia Yes 2 months interest on prepaid amt that exceeds 1/3 of
original UPB
36 Months Refinance or sale
DE Delaware Yes No restrictions None Refinance or sale
FL Florida Yes No restrictions None Refinance or sale
GA Georgia Yes No restrictions None Refinance or sale
HI Hawaii Yes No restrictions None Refinance or sale
IA Iowa Yes No restrictions None Refinance or sale
ID Idaho Yes No restrictions None Refinance or sale
IL Illinois Yes No restrictions None Refinance or sale Borrower must be corporation if
interest rate is > 8%
IN Indiana Yes No restrictions None Refinance or sale
KS Kansas Yes No restrictions 6 months Refinance or sale
KY Kentucky Yes No restrictions None Refinance or sale
LA Louisiana Yes No restrictions None Refinance or sale
MA Massachusetts Yes No restrictions 36 Months Refinance or sale
MD Maryland Yes No restrictions 36 Months Refinance or sale
ME Maine Yes No restrictions None Refinance or sale
MI Michigan Yes 1% of amount prepaid 36 Months Refinance or sale
MN Minnesota Yes Lesser of (i) 2% of UPB or (ii) 60 days of interest 42 Months Refinance only PPP restrictions only apply to loans
within conforming limits
MO Missouri Yes No restrictions None Refinance or sale
MS Mississippi Yes 5% of UPB if prepaid in months 1-12
4% of UPB if prepaid in months 13-24
3% of UPB if prepaid in months 25-36
2% of UPB if prepaid in months 37-48
1% of UPB if prepaid in months 49-60
60 Months Refinance or sale
MT Montana Yes No restrictions None Refinance or sale
NC North Carolina Yes No restrictions None Refinance or sale
ND North Dakota Yes No restrictions None Refinance or sale
NE Nebraska Yes No restrictions None Refinance or sale
NH New Hampshire Yes No restrictions Refinance or sale
NJ New Jersey Yes No restrictions None Refinance or sale Borrower must be corporation if
interest rate is > 6%
NM New Mexico No N/A N/A N/A
NV Nevada Yes No restrictions None Refinance or sale
NY New York Yes No restrictions None Refinance or sale
OH Ohio Yes 1% of original UPB 60 Months Refinance or sale
OK Oklahoma Yes No restrictions None Refinance or sale
OR Oregon Yes No restrictions None Refinance or sale
PA Pennsylvania Yes No restrictions None Refinance or sale Not permitted for loans less than base
amount ($312,178)
RI Rhode Island Yes 1-4 Purchase: 2% during first year only.
Otherwise, no restrictions
Purchase: 12 months
Refinance: 60 months
SC South Carolina Yes No restrictions None Refinance or sale
SD South Dakota Yes No restrictions None Refinance or sale
TN Tennessee Yes No restrictions None Refinance or sale
TX Texas Yes No restrictions None Refinance or sale
UT Utah Yes No restrictions None Refinance or sale
VA Virginia Yes No restrictions None Refinance or sale
VT Vermont No N/A N/A N/A
WA Washington Yes No restrictions PPP on ARM cannot extend
beyond 60 days prior to the
initial rate change date
Refinance or sale
WI Wisconsin Yes No restrictions None Refinance or sale No PPP permitted on ARMS
WV West Virginia Yes No restrictions None Refinance or sale
WY Wyoming Yes No restrictions None Refinance or saleAre you a direct lender or broker? There are rules that sometimes come into play for states like PA and OH, but they aren't uniform across the board from lender to lender in the commercial space. I have brokered loans in these states that include prepayment penalties.
Yes we are a direct lender . Barrett actually brokers a lot of bridge, fix and flip, ground up construction and DSCR . I believe Rich Hauser is your rep
Yep!
Brittany Minocchi - Barrett Financial Group, LLC522 Reviews - 2yMelanie P.Pro MemberRental Property Investor · Member since 2023 · 1k+ posts · 922 votesWhere is that in the law? I have loans in PA under that amount with prepayment penalties.
LOL! You're doing it here too. Don't know much about this either, huh? Leave it to Mr. Argumentative to come out with the totally irrelevant anecdote as if it changes anything.
- Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes2y
Quote from @Melanie P.:
Where is that in the law? I have loans in PA under that amount with prepayment penalties.LOL! You're doing it here too. Don't know much about this either, huh? Leave it to Mr. Argumentative to come out with the totally irrelevant anecdote as if it changes anything.
If you scroll back to @Brittany Minocchi's comments you'll see that I am apparently correct and they are allowed.
The promissory notes I signed have prepayment penalties. I wasn't arguing they weren't legal. If there was a law I was not aware of I wanted to learn about it!
And yes, if prepayment penalties were not legal that would be VERY pertinent in this post since the poster is in my state and considering loans they may want to refinance before too long when rates drop.
- 2yTim SwierczekPro MemberLender · White Bear Township, MN · Member since 2016 · 1k+ posts · 1k+ votes
Quote from @Jacqueline Ho:
Hi everyone! I am trying to understanding the history of interest rates for an LLC loan. My partner and I are in the middle of purchasing a duplex in the Philadelphia area. We are taking a loan out on the LLC with one of us as a personal guarantor; from my understanding, this is a commercial loan. The loan is 7.75% 30-yr fixed.
We were asking our mortgage broker if interest rates ever decrease for these loans. Our broker mentioned that the average interest rate is 7.5-9% and they have never seen the rates drop below 7%. Is this accurate? How would one make a BRRR work in this scenario?I think your broker is accurate when it comes to the loan type that is commonly called a DSCR loan. DSCR loans are subprime loans that were re-branded and the name was stolen from the commercial portfolio loan industry. Those loans are expense and I do not recall them going below 7%. I'm sure there will be one person with a perfect scenario including an unreasonably low LTV that will disagree, but I don't believe your asking for what is the lowest they can go in a perfect situation, but rather what is a realistic rate you can expect in the future and 7% is a realistic low end.
That being said you can get significantly lower rates and fees on a commercial portfolio loan that uses a DSCR calculation along with looking at your global cash flow. These loans require your personal "DTI" to be in order, but to put it in perspective I see those rates at or around 7.49% on investment LLC loans with 20-25% down and 2% or less in orignation fees. A few years ago I locked into one of these loans for 5 years at 4%, also on an investment property loan that wrapped two properties and pulled cash out to 75%. This is not meant to brag. It's meant to illustrate that if you're personal income qualifies you will be able to beat the "DSCR" rates in the future. - 2yLien VuongBusiness MemberReal Estate Agent · Boston, MA · Member since 2018 · 2k+ posts · 1k+ votes
Likely you have an ARM (adjustable rate mortgage) rate with a 30 year amortization not 30 year fixed. Typically they will outline you the floor and ceiling on that rate to give you an idea that if rates drop, what's the min on it. This is a very typical set up for LLC (commercial loan).
The Elle Group5153 Reviews - 2yErik EstradaBusiness MemberLender · Member since 2022 · 6k+ posts · 1k+ votes
Quote from @Jacqueline Ho:
Hi everyone! I am trying to understanding the history of interest rates for an LLC loan. My partner and I are in the middle of purchasing a duplex in the Philadelphia area. We are taking a loan out on the LLC with one of us as a personal guarantor; from my understanding, this is a commercial loan. The loan is 7.75% 30-yr fixed.
We were asking our mortgage broker if interest rates ever decrease for these loans. Our broker mentioned that the average interest rate is 7.5-9% and they have never seen the rates drop below 7%. Is this accurate? How would one make a BRRR work in this scenario?DSCR loans for 1-4 Units have been in the low 5s-high 4% when rates were very low overall. back a few years ago
They tend to lag behind conventional mortgages, but have stayed stable these lasts few months. Slight hikes here and there and dips but I have seen DSCR in the 7s to high 8s for the past 12 months. Lately you can price a DSCR loan in the high 6s if its a low leverage, excellent credit deal
LuxePrivate Investments LLC 572 Reviews - Lender · Member since 2024 · 121 posts · 14 votes2y
Quote from @Jacqueline Ho:
Hi everyone! I am trying to understanding the history of interest rates for an LLC loan. My partner and I are in the middle of purchasing a duplex in the Philadelphia area. We are taking a loan out on the LLC with one of us as a personal guarantor; from my understanding, this is a commercial loan. The loan is 7.75% 30-yr fixed.
We were asking our mortgage broker if interest rates ever decrease for these loans. Our broker mentioned that the average interest rate is 7.5-9% and they have never seen the rates drop below 7%. Is this accurate? How would one make a BRRR work in this scenario?Always good to shop around. Rates/terms/fees can vary.
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