What are the most common terms of a commercial real estate bridge loan?
Answer:A commercial real estate bridge loan will usually have 80 percent loan-to-cost, 70 percent loan-to-value ratios, and often a portion of the loan will be held back until additional value has been achieved within the bridge loan project - such as reaching specific construction phase, or vacancy level, or certain improvements are finished.
A commercial real estate bridge loan will be extended usually for periods ranging from 1 to 3 years, and extensions are usually possible if need is demonstrated.
Typically, commercial real estate bridge loans will have rates based on a prime rate plus 2 or 3% margin; or on LIBOR with 3 to 4.5% margin. Prepayment penalties do not apply with a commercial real estate bridge loan and contractors are expected to have high level of expertise with commercial real estate properties.
Commercial real estate bridge loan closing costs will be between $5000 and $10,000 for loans under $2,000,000; and could reach $20,000 and more for loans above $2,000,000. Amortization offered is often interest-only.
Link:
Link:
Link: See All 3 National Credit Scores & 3 Reports Instantly, Online & Free
| Not at all | Definitely |
Mortgage QnA is not a common forum. We have special rules:
- Post no questions here. To ask a question, click the Ask a Question link
- We will not publish answers that include any form of advertising
- Add your answer only if it will contrubute to the quality of this Mortgage QnA and help future readers
Common misspellings: mortage and morgage