I am looking to finance a property with a Profit Sharing Plan. This is my first non-recourse loan. I contacted North American Savings Bank, and I'm hoping to find other lenders to compare the rates. The NASB rates were a bit higher than expected:
The loan amount is determined by the property condition, cash flow, retirement reserves, and recent property history. We have a minimum $50,000 loan amount and require some reserves to be shown in any retirement account bearing your name. The bank fees for a purchase transaction are 1% of the loan amount (1.5% if it is a cash out that is owned greater than 6 months) plus $695 in processing/underwriting fees.
The interest rates for a non-recourse loan are as follows:
-4.875% for a 5/1 ARM amortized over 20-25 years
-5.375% for a 10/1 ARM amortized over 20-25 years
-5.0% for a 10 year fixed loan that is amortized over a 10 year period
-5.375% for a 15 year fixed loan that is amortized over a 15 year period
-5.75% for a 20 year fixed loan that is amortized over a 20 year period
-Special quotes may be given for multi-family property 3+ units, rural property, and high rise condominium units
You didn't mention whether the property is single family or multi-family.
See list of lenders listed on following page.
Chase is by far and away the best if you can swing the down payment. 5+ units 500k minimum loan amount.
those are fabulous terms if you can actually get it done... lenders are very very particular on these loans and most folks get pretty frustrated with them.. its not like conventional were If you qualify they do the deal...
@Michael Evans - the property is a 4-plex.
@Matt Hoyt - the property I am looking at is less than the 500K minimum. Maybe the next one. :)
@Jay Hinrichs - those terms were from NASB. I think I'm going to move forward with the 5/1 ARM @ 4.875% over 20 years.
Those rates look good to me. Good luck.
@Mark Nolan is your list of lenders for Non-recourse loans form 2016 updated?
I ended up with a non-recourse loan with First Western Federal Savings Bank www.myiralender.com. Took out the loan in Jan 2017 and selling the property next week!
My loan terms: 50% LTV, 5.5% 10/1 ARM 25 years
Could have gone with 5/1, but who knew I'd be selling in less than 3 years. :)
Options (in 2017)
Term: 20 years on Fixed rate loan and 25 years on Adjustable rate loans
Rate: 4.25% on 3/1 ARM, 4.875% on 5/1 ARM, 5.5% on 10/1 ARM, or 6.25% Fixed
Fee: 1% origination fee plus $300 processing and $300 underwriting fee
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