Long Term Fixed Rate Commercial Mortgages Are Returning

May 15, 2010 (PRLEAP.COM) Business News
Commercial Finance Advisors, Inc is pleased to announce that long term fixed commercial mortgage financing is returning to the market. Since the beginning of the credit crisis and largely due to the demise of the commercial secondary market, this type of financing has been nonexistent.

However fixed rate financing is returning to the market, giving borrowers the option of 10, 15 and 20 fixed rates with amortization schedules from 10 to 25 years. Amortization schedules can match the fixed period, but is not necessary. For example, 10 year fixed with 20 year amortization schedule is permitted.

"All in all, this is the best type of commercial real estate loans we have seen in two years." Comments Jeff Rauth, President. "To us, this proves that we are on the way up and that the markets have stabilized. Borrowers for both investment properties and owner users have been searching hard for long term fixed rate financing since 2007. Most are greatly concerned where rates are going with inflation looming. These long term fixed rate programs, give borrowers peace of mind and the ability to better predict and plan for the future."

Interest rates are generally priced of the 10 year treasury with effective rates between 6% - 6.5%. Loan to value goes up to 75%, and possibly more for high net worth individuals. Property types are primarily the major four - office, retail, apartments or industrial. However, special use properties are eligible on a case by case basis.

Loan amounts range from $500,000 to $20,000,000 nationally. And the programs are for either owner occupants (owner users) or investments properties. These programs are also a solid source for credit tenant financing as well as 100% owner occupant facilities. Debt service coverage ratios are set at a minimum of a 1.3.