1st LOC on a paid for building

[Brik8]

Looking for a little input on this...

I have a 5 plex right now that is mortgage free. The assessed proprty value is 240,000. I am trying to secure a 15% down payment for a 6 plex that I have an accepted offer on by getting a LOC on the 5 plex.

I`ve been to a 2 banks and the best I can find so far is Prime + 2% (because it`s commercial) and 75% of the assessed value of the 240,000.
They have now indicated to me that I would need to pay a 1% set up fee, so in essence a $1,800 fee for setting up the LOC.

I was not OK with that amount, so asked the banker to hold off for now. I then checked with my lawyer and for them to register against the property his fees would come to about 800-1000.

So to set up this LOC secured by a completely paid for building would cost me $2,800!!!!!!!!!!

Does that sound right? Are those fees reasonable? Does anyone else have any opther experience or ideas?

 

[Thomas Beyer]

QUOTE (Brik8 @ Mar 25 2009, 10:59 AM) Looking for a little input on this...

I have a 5 plex right now that is mortgage free. The assessed proprty value is 240,000. I am trying to secure a 15% down payment for a 6 plex that I have an accepted offer on by getting a LOC on the 5 plex.

I`ve been to a 2 banks and the best I can find so far is Prime + 2% (because it`s commercial) and 75% of the assessed value of the 240,000.
They have now indicated to me that I would need to pay a 1% set up fee, so in essence a $1,800 fee for setting up the LOC.

I was not OK with that amount, so asked the banker to hold off for now. I then checked with my lawyer and for them to register against the property his fees would come to about 800-1000.

So to set up this LOC secured by a completely paid for building would cost me $2,800!!!!!!!!!!

Does that sound right? Are those fees reasonable? Does anyone else have any opther experience or ideas?
yes, this is all VERY reasonable for a commercial property !

1% setup fee

only $1000 legal fees !

prime + 2 = 4.5%

75% = great LTV !

Usually you also need: appraisal + environmental report + engineering report for another $10,000 !

why not get a CMHC insured mortgage at around 4% ?

 

[Brik8]

QUOTE (thomasbeyer2000 @ Mar 25 2009, 03:10 PM) yes, this is all VERY reasonable for a commercial property !

1% setup fee

only $1000 legal fees !

prime + 2 = 4.5%

75% = great LTV !

Usually you also need: appraisal + environmental report + engineering report for another $10,000 !

why not get a CMHC insured mortgage at around 4% ?

Yes they are giving me 75% of value, an appraisal will need to be done in future if I want to exceed 80,000 (they are setting it up with a stopper @ 80,000, until appraisal.

I was looking at getting a CMHC mortgage, however the best rate I could find from my Mortgage Broker was 4.25% CMHC...

Thanks for the reply Thomas...I guess I should stop whinning about this then...

 

[nepoez]

I curious where you are located. $240k for a 5-plex?

QUOTE (Brik8 @ Mar 26 2009, 04:37 AM) Yes they are giving me 75% of value, an appraisal will need to be done in future if I want to exceed 80,000 (they are setting it up with a stopper @ 80,000, until appraisal.

I was looking at getting a CMHC mortgage, however the best rate I could find from my Mortgage Broker was 4.25% CMHC...

Thanks for the reply Thomas...I guess I should stop whinning about this then...

 

[Brik8]

Northern Ontario

 

[PeterKinchMortgageTeam]

QUOTE (thomasbeyer2000 @ Mar 25 2009, 12:10 PM) yes, this is all VERY reasonable for a commercial property !

1% setup fee

only $1000 legal fees !

prime + 2 = 4.5%

75% = great LTV !

Usually you also need: appraisal + environmental report + engineering report for another $10,000 !

why not get a CMHC insured mortgage at around 4% ?

Agreed - those are great terms for a commerical property. I doubt you`d find any better if you shopped around.

Hope that helps,