Buying a house is one of the biggest and most
important decisions of a lifetime. Therefore, it requires meticulous planning
and careful consideration. After saving money for the down payment, you need to
select a suitable housing loan based on your needs. Contrary to the general
belief, apartment loans in San Bernardino aren’t only available for purchase of
a house; you can also get loans for construction, renovation and extension of
your multifamily property.
Moreover, you have the option to transfer your
existing housing loan from one lender to another. A good house is essential for
the all-round wellbeing of a family. Therefore, it’s important to give utmost
priority to the decision of purchasing or improving a house. Easy availability
of housing finance has helped many people fulfill the ambition of owning a good
house. In case you have similar aspirations, the best time to act is now.
Unless you plan to forego the benefits of using
leverage and pay all cash for property, you need to understand how to finance
multifamily and apartment properties. There are various options available with
their advantages.
Lender
Types for Financing or Refinancing Apartment Loans in San Bernardino
- Hard money/bridge lenders
- Conventional lenders
-
Agency financing
Hard
Money Apartment Loan Lenders in San Bernardino
Financing a multifamily property through hard money
finance is a great way to obtain flexible transaction. And, having a good
relationship with a hard money lender is beneficial to your investing business.
Advantages:
- The hard money lenders primarily underwrite the numbers on the deal and the feasibility of the property producing a profit. They focus on the plan for the property being able to pay back their loan.
-
This contrasts with conventional lenders
that will underwrite to the borrower’s credit. If you have bad credit they are
an easier option.
-
Rates are interest only. The loan
principal needs to get paid off entirely either by refinancing or selling the
property.
-
Funding is quick within weeks vs. the
typical 30-45 days for conventional lenders
- They’ll give higher emphasis to borrowers experience and track record. If you do several successful deals with them, they’ll give you better rates and other options as their confidence in your business increases. You can sometimes negotiate with them a little easier than conventional lenders, as they want to maintain your business.
Conventional
Apartment Loan Lender in San Bernardino
Conventional lenders will also finance multifamily
property. There are banks to sanction apartment loans in San Bernardino by
keeping the required documents in check but the process is too lengthy and need
a good credit score. However, conventional apartment loan lenders offer similar
standard types of loans to the general public but with more flexible terms. They
don’t tend to deviate much from one another similar standard types of apartment
loans in San Bernardino because they are governed by national banking and
lending policy set by the federal reserve and government sponsored agencies
like Fannie Mae and Freddie Mac. These agencies buy their apartment loans on
the secondary market which allows the banks to free up space on their balance
sheet to create more loans. Because of the regulatory environment they operate,
they require vast documentation to be in compliance with industry policy.
Advantages:
-
The rates of apartment loans in San
Bernardino are among the lowest and vastly lower than hard money alternatives.
Rates can range from 4.5-6% depending on the deal particulars and borrower’s
credit.
-
They will lend with higher leverage.
Typically for commercial loans they will be in the range of 60-75% and even 80%
depending on particulars of the deal.
-
Apartment loans in San Bernardino are
amortized up to 30 years depending on deal particulars and product offerings
-
Terms range from 5-10 years depending on
deal particulars and product offerings
- Because they have branch locations, they are more accessible
Agency
Financing Apartment Loans in San Bernardino
Agency financing apartment loans in San Bernardino
generally refers to Fannie Mae or Freddie Mac which are government sponsored
entities that finance multifamily projects. On the commercial lending side,
they tend to be the most competitive. They will not do small loan amounts. They
are also more stringent on their due-diligence of the property.
Advantages:
-
Higher leverage – 80% and sometimes
more, depending on deal particulars and if they offer any special products
-
The lowest interest rates range from
4.3-5% depending on deal particulars and product offerings
-
Apartment loans in San Bernardino are
amortized up to 30 years depending on deal particulars and product offerings
-
Terms range from 5-10 years depending on
deal particulars and product offerings
-
Interest only periods may be available
-
Level of documentation is not as large
- Strength of borrowers experience given greater consideration in qualifying
Since there are different options for apartment
loans in San Bernardino, working with an experienced loan broker/advisor is extremely
helpful. This is because an expert will only able to guide you through the
process for the best fit to finance on financing/refinancing apartment loans in
San Bernardino.
Need a helping hand while deciding the best
apartment loan option for you in San Bernardino? Contact the experienced loan
advisors from ALB Commercial
Capital. Stop by the site to have a look into the best
rate apartment loan in San Bernardino!
