C-Loans Commercial Mortgage Lender Databank

112706 Resource 78789 78860 1071 1136749843553 1215812313452 Controlled Commercial Real Estate Loans at Par

When a Commercial Real Estate Lender Makes a Loan at Par, He Charges No Points

It is expensive for a commercial real estate lender to underwrite a commercial real estate loan.  That's why the overwhelming number of commercial lenders charge at least one point.  The typical hard money lender charges between three to six points for a commercial loan. Some lenders, however, make loans at par.  Par means the lender charges zero points. Ten years ago the only type of lender that made loans at par was a life insurance company.  Today more and more commercial lenders are making loans at par so that their mortgage brokers can add one point and still be competitive.  For example, many Wall Street investment bankers will buy loans from their CMBS conduits at par.  A CMBS conduit is a mortgage banker that books CMBS loans destined for sale to investment banks and banks. But there is a problem.  There is no free lunch.  Those lenders making loans at par almost always charge a prepayment penalty.  And prepayment penalties on commercial loans today are typically very expensive.  I have seen prepayment penalties as large as $1 million on a $10 million commercial loan! Blackburne & Brown, the hard money commercial lender, is now making zero point hard money loans in California with no prepayment penalty.  For details, please call Mike Thurman at (916) 338-3232 or email him at <a href="mailto:thurman@blackburne.com">thurman@blackburne.com</a>. 9 application/xml false commercial financing commercial loan commercial mortgage commercial real estate C-Loans Commercial Mortgage Lender Databank Apply to 750 Commercial Mortgage Lenders in Four Minutes http://www.c-loans.com/onlineapp Mozilla/4.0 (compatible; MSIE 7.0; Windows NT 5.1; .NET CLR 1.0.3705; .NET CLR 1.1.4322; Media Center PC 4.0) 127.0.0.1 127.0.0.1 johngaudio 67.190.87.246 false true false false true 198508 false false true false false false true 78789 blog blogsite/CLoans/web