Five Useful Tips When Applying for a Multifamily Loan
Multifamily financing is a mortgage intended for someone who wants to buy or refinance smaller multifamily properties having no less than four units and big apartment buildings with at least five units. Multifamily loans are a good option for both veteran and newbie real estate investors and professionals. Rates are usually around 4.5 percent to 12 percent and terms usually go up to 35 years.
If you’re in search of a permanent multifamily loan for rental units, below are five handy tips you should consider:
1. Apply as soon as possible.
Any knowledgeable loan officer and underwriter will always expedite the process, beginning with the inquiry up to the funding. It isn’t always like that, but there are occasional humps that tend to bring delays. For instance, the underwriter may have backlogs to clear or the borrower may have incomplete documentation. Therefore, it’s always best to begin the process early.
2. There are lots of options.
We just want to emphasize that your options are many and varied – banks, credit unions, private investors, etc. If you know you have options, you will naturally broaden your perspective as to which of them is the most right for you.
3. Lock that interest rate upon getting your loan approved.
This may sound basic or perhaps even trite, but as soon as your loan is approved, lock that interest rate. We all have a take on which direction the rates will go, but does anyone really know with certainty? If you’ve come as far as getting the loan approved, the best thing to do is to lock your rate and stop stressing. This way, you can rule out any rate movement risks and proceed knowing what to expect.
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