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