How do you make sure you are choosing the right quote in CRE?
I always wonder how do borrowers decide when they have enough information and options to accept a quote from a lender, its difficult to decide when there are too many options, sometimes less is better. WDYT.
[{"id": "hs9ylun", "text": "Take the cheapest option that aligns best with your business plan and never take fixed rate debt.", "replies": [{"id": "hsa09l2", "text": "&gt; never take fixed rate debt.\n\nCan you expand on this?", "replies": [{"id": "hsa1l2z", "text": "Sure, don\u2019t take fixed rate debt better to take out I/O to have the flexibility to pay off the loan at any time for a sale or refinance. I don\u2019t want to have to pay a bank some stupid massive YM / defeasance penalty because the market is hot and I want to sell. If you were a fixed rate borrower prior to COVID youre kind of fucked right now, you\u2019re paying a high rate and can\u2019t refi or sell your property without incurring massive penalty since rates have moved so hard against you.", "replies": [{"id": "hsaov63", "text": "Most people are actually hedging in their floaters right now and may be smart given current rates and recent guidance from Fed", "replies": [{"id": "hsatfd8", "text": "Would still rather own I/O and buy a cap to hedge, doing fixed rate debt is silly you get creamed if you try and sell early. Cap costs are cheap..", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hsado96", "text": "You might be overthinking it or getting too many options and adding confusion to the process. Is the financing program acceptable to you? Do you feel the lender can get it closed timely for you? Is the rate and cost reasonable? Is there transparency into the terms so there are no surprises? Is the rate fixed long enough to provide you some protection should rates move up quickly. Are the terms quoted locked in until closing? Are you comfortable with the reputation with the lender\u2019s company?", "replies": [], "depth": 1}]