As interest rates continue to rise from historic lows, financing is becoming more and more expensive. Many commercial property owners are looking for long term security in their loans and rates. Some of the 30 year fixed hard money commercial loans on the market today can make a lot of sense - even to those who can qualify for bank funding.
Generally speaking, bank financing offers lower rates and less expensive funding costs than hard money products. For commercial loans, however, one big drawback is the term of those lower rates. Many commercial loans made are fixed for only a fraction of the total loan term. Perhaps a 5 year fixed term on a 20 or 30 year loan product, with the rate adjustable after that initial fixed term.
With the fast pace of rising interest rates, the adjustable portion of these loans are much less attractive today than they were a year or two ago. Many commercial property owners are looking for long term solutions with true fixed rates for the term of the loan. Having a true long term fixed rate removes a lot of potential future risk and gives peace of mind knowing that your loan terms are locked - regardless of the interest rate environment.
While most bank loans for commercial properties are not true 30 year fixed products, there are hard money loan products available today that can meet this need.
We specialize in private hard money loans. We work with investors of all sizes and have access to true California 30 year fixed hard money commercial loans that can make sense - even for investors who have never needed to look into private money loans in the past. These 30 year fixed loan products are typically offering higher loan to value leverage points than many bank loans - and offer the ability to buy the rate down.
With the ability to buy the rate down, these 30 year fixed commercial loans start to make a lot of sense. At the full buy down point, the rates are similar to a number of comparable bank loan rates. While the upfront buy down means that closing costs are higher than a hypothetical bank loan, having that rate bought down for a full 30 year fixed term means that you can hold this loan and not need to refinance the property again.
With the higher leverage point offered, it also gives investors the ability to pull more cash out than they might otherwise be able to with a bank. Knowing your rate is fixed for a full 30 years, investors can make a true cost benefit calculation. Of course, knowing your rate is fixed for 30 years also gives peace of mind. Being able to sleep well at night knowing that you do not need to worry about rising interest rates is hard to put a price tag on!
In addition to the above-mentioned benefits, these 30 year fixed commercial loan products offer an interest only option of up to 10 years. Once the interest only period is expired, your rate stays fixed and the loan is amortized over the remaining term.
For more information on these products, call us today. Or visit our webpage on 30 year fixed commercial loans.