Advice on Term Sheet? Cash Out Refi on a 4-Unit

[Jill Haselman]

Doing a cash-out refi on a 4-Unit that has completed a gut renovation. I'm working with a mortgage broker that I very much like working with, but these terms strike me mediocre at best. I have a strong track record, great credit, funded the rehab personally, and I'm showing >1.2x DSCR. It's adjustable, but only UP? Prepayment penalty?

Thoughts?

Terms:  

Loan Request:	A new first lien in the amount of $647,500
Property Type:	2-4 Unit Investment
Term:	360 Month Term & Amortization
Fixed Rate Period:	3 years
Adjustable Rate Period:	27 years
Interest Rate:	7.740% during the Fixed Rate Period, adjustable after the Fixed Rate Period
Adjustable Interest Rate:	WSJ Prime (index) + 5.00% (margin) during the Adjustable Rate Period
Rate Adjustment Caps:	Maximum 2.00% on the first rate adjustment, 1.00% every 6 months thereafter
Lifetime Limits:	The Interest Rate during the Adjustable Rate Period will never be below 7.74% or above 13.74%
Prepayment Penalty:	Equal to 3.00% of the amount paid in full during the first 3 year(s) of the loan
Rate Buydown:	None
Prepay Buydown:	None