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Posts Tagged ‘Financing’

One of the first steps before you start looking for your dream house is to ask yourself what you can afford to spend on a monthly house payment. Keep in mind when financing real estate that the lenders will be able to tell you only what you MIGHT be able to afford based on your salary and level of debt including any credit card debt. As the real estate market continues to grow and new technology gains ground, widely accepted beliefs that were true just a few years ago may not be true today. You want to work with your mortgage broker or lender to develop an individual loan or mortgage program based on your credit worthiness. Your property taxes may be deductible. Consult with your CPA or other tax advisor for current tax information. With an adjustable rate mortgage the initial interest rate is usually lower than with a fixed-rate mortgage and the monthly payment will also be lower. If you’re on a fixed income, an adjustable rate mortgage (ARM), especially a short-term ARM, may Read More

Conventional loan options on apartment financing is currently much more scattered than in the past.   Previously rates, programs and loan to value, etc where very similar between competing lenders and banks.  Now however, with the issues on credit markets we are seeing wide differences in offered loans.  For example, when we would shopped loans for our clients just a year ago, the difference in interest rates, from one source to the next would be maybe only 5% or so.  One bank may have quoted an effective rate of 5.95%, the next 6.1%.  Now it is not uncommon to see one source quote rates 100 basis points over the next, with wide differences in term, fixed period and even amortization schedule.  The reasons here are complex and wide reaching.  For example, here in the Midwest, we had a prominent bank that did a lot of apartment financing, had their own status downgraded to “junk”, which had an immediate and negative impact onto their cost of capital and in turn what Read More