Five Useful Tips When Applying for a Multifamily Loan
Multifamily financing is a mortgage involving buying or refinancing large apartment buildings with a minimum of five units and smaller properties with at least two. Multifamily loans are a wonderful option for all kinds of real estate investors and professionals, old hands and novices alike. Terms may extend up to 35 years and rates between 4.5 percent and 12 percent.
If you’re in search of a permanent multifamily loan for rental units, below are five handy tips you should consider:
1. Apply as early as you can.
Any good loan officer and underwriting team will do what they can to fast-track the process, starting from the inquiry all the way to actual 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. Hence, it always makes sense to begin the process as early as possible.
2. There are lots of options.
This will not be an exhaustive discussion on the various alternatives available for multifamily mortgage seekers. The lowest requirement for low debt-service coverage ratio is1.25 and may increase from there. To compute your low debt-service coverage ratio, your NOI or net operating income must be divided by the annual debt service obligation.Read More →