I'm curious if anyone has experience regarding commercial loans that have shorter amortization schedules (ex less than 20 years). Are smaller banks willing to extend the fixed rate period in "exchange" for a shorter amortization schedule?
So for example, rather than having a 7-year fixed commercial loan on a 30-year amortization schedule, are banks willing to simply do a 15-year fixed commercial loan on a 15-year amortization schedule?
Or is this not really a thing and I'm simply letting my spreadsheet-inclined mind wander?
That’s a good question. I’ll check back for answers from others.
What I keep hearing is that EVERYTHING is negotiable with commercial loans. I was just trying to think outside the box as someone who wants to retire in 15-17 years and would love to have the security of a fixed rate loan that would presumably be paid off when I retire.
Morning Tom. I will give you some examples of what I have negotiated on current holdings and also am in discussions with a much larger project that includes a national lender.
Local community bank refinanced December and then again in June both 7 year fixed money.
Scenario # 1 - fixed rate 7 years - fully amortized 7 year loan - rate 5% / like you shooting to be paid off at a retirement age of 65 - 6 years 5 months and declining
Scenario # 2 - fixed rate 5 years - amortized 13/14 year loans rate 5%
Current scenario for larger project - we are discussing a 10 year fixed rate with a national lender. Check back with me in 30 days and I should have a formal proposal .
Side note - I have read on BP and am also finding locally credit unions are a good source for investors.
Tom, I did not have info in front of me so double checked my loans . I stand corrected scenario 1 - interest rate is 4.75% and scenario 2 is also 4.75% along with a 7 year term .