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Old 12-22-2011, 01:59 PM
 
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What is the national average for commercial property mortgage rates? Thanks! Someone is quoting me about 7%.... I think that is way too high...
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Old 12-22-2011, 02:01 PM
 
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Originally Posted by evilnewbie View Post
What is the national average for commercial property mortgage rates? Thanks! Someone is quoting me about 7%.... I think that is way too high...
There are a lot of factors. Your credit. The viability of the property. The terms. Etc. etc. I'd shop around. And I'd call a commercial real estate broker for advice.
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Old 12-22-2011, 02:25 PM
 
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My credit is spotless in the 820-830... the property is a great property and was a foreclosoure, so I got it at a great price... the terms is 15 years... I have a high salary income... I bought a house at 4% interest rate... so when I was shopping for a commercial building... I was kind of shocked at 7% interest rate...
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Old 12-22-2011, 05:16 PM
 
Location: Lexington, SC
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I was curious myself so I did an online search. Appears commercial property for an indivudual is about 20% down and a 5-7% interest rate.

Of course like anything else, some sites had some good suck one it rates.

Keep us informed.
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Old 12-22-2011, 06:51 PM
 
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I am putting zero down... and they are okay with it... they gave me some "rough" numbers but when I crunch out the numbers, it seemed like it was 7% and no mortgage insurance... I will have to clarify with them later..
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Old 12-22-2011, 07:58 PM
 
Location: Salem, OR
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Originally Posted by evilnewbie View Post
I am putting zero down... and they are okay with it... they gave me some "rough" numbers but when I crunch out the numbers, it seemed like it was 7% and no mortgage insurance... I will have to clarify with them later..
I've never heard of 0 down commercial property. That interest rate makes sense based on 0 down.
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Old 12-23-2011, 10:07 AM
 
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zero down is very difficult to find these days on commercial property. More typical is 25% down, and 7% is also fairly typical. A lot will also depend on if it's purely an income property for investment or for your business. If it's income property, how will it cash flow, etc..
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Old 12-23-2011, 10:48 AM
 
Location: Austin
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$0 down on commercial? Someone's yanking your chain!
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Old 12-23-2011, 01:47 PM
 
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No, I have a good relationship with the banks... zero down means zero down... No PMI, means no PMI as well... I just thought the interest rate should be lower... Probably talk to them after Christmas about lowering the interest rate..
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Old 12-23-2011, 04:52 PM
 
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Originally Posted by evilnewbie View Post
No, I have a good relationship with the banks... zero down means zero down... No PMI, means no PMI as well... I just thought the interest rate should be lower... Probably talk to them after Christmas about lowering the interest rate..
And the bank must be on VERY good terms with the bank examiners. I'm pretty sure that FDIC, OCC, et al require 20-25% down. Banks seldom have the ability to circumvent federal and state banking regulations.

I actually obtained a 100% loan on an office building once. But that was in 1985. I've been a commercial appraiser since 1983 and I think it's been at least 15 or 20 years since I've seen a federally insured lender loan 100%. Not a wise move as it would be classified as high risk no matter what the borrow's credit is. Insured banks will typically be required to place funds to cover high risk loans into a reserve fund once the examiner discovers it, effectively lowering their ability to borrow and lend money.

What I've seen lately is a down payment requirement of 25-35% for investor loans as long as it has a good debt coverage ratio (greater than 1.2). Owner occupied commercial property might go as low as 10% but that would be an SBA loan where the SBA assumes part of the risk.
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