Getting ready to close on a refinance out of a hard money loan
I was just sent the commitment letter. 

Are these terms fair? + 3.00% seems steep to me but maybe I’m wrong given the current climate. Could/should I try to negotiate? 

LOAN TERM:
300 months, consisting of an initial 12 month construction period followed
by a 288 term-out repayment period.
INTEREST RATE: Prime plus 1.00% during the initial 12 month construction period. After
the initial 12 month construction period the rate will be fixed at 5.75% for
the next 48 months. At the end of the initial 60 months the interest rate
will adjust every 5-years thereafter to the prevailing Federal Home Loan
Bank (FHLB) Pittsburgh Five-Year, Long Term Fixed Rate + 3.00% with
a floor rate of 5.25%. Prepayment fee of 2.00% within the first 5 years of the loan.
[{"id": "itsnpfe", "text": "You probably wont beat the 5.75 if you refinance during that time with the prepay. After that period, you should be refinancing to fix the rate or take cash out anyway. The prepay will be gone as that will be a total of 60 months. \n\nStart shopping about 4 months before the 5 years is up and you'll be set for success. To be honest this is an almost too good to be true deal for the rate climate right now, especially for a construction loan. \n\nIn fact.... what institution is doing this for you. I may need to speak with them to bring them some business....", "replies": [{"id": "itssgna", "text": "These are crazy good terms. (I have been rate shopping an SBA 504 and with rate promos and a bunch of haggling have gotten to fixed 5.84% 25/25.)", "replies": [], "depth": 2}, {"id": "iu6che0", "text": "\nIt\u2019s a small local bank south of Pittsburgh. They typically stay local from what I understand. If you invest in that area, dm me and I\u2019ll get you contact information \n\nThank you for your advice and perspective. I\u2019m experienced enough to make me dangerous but I\u2019m not an expert. That info was reassuring", "replies": [], "depth": 2}], "depth": 1}, {"id": "itsqbry", "text": "What are you building, where are you building, and what\u2019s the LTC on the Development. \n\nNothing against you but this quote seems whack. I try to stay away from Hard Money Lenders as much as possible. \n\nI can\u2019t believe I\u2019m saying this but around half of the deals I\u2019ve closed in the last 16 months have been developments in the top 5 Metro Areas. Total Project Costs have ranged in the $5MM - $40MM range. Myself and the Developers had to go through A LOT to get every deal done. More so than ever over the last ten years.", "replies": [{"id": "iu6cn9i", "text": "What\u2019s wack about it ? I\u2019m not taking it as something against me, but this seems to be the opposite of the other comments here.", "replies": [], "depth": 2}], "depth": 1}, {"id": "itsy3tn", "text": "I\u2019m a commercial mortgage broker. This is good stuff. Always expect in every negotiation that there\u2019s always room in basic things like the rate. Also, you can negotiate the amount of IO you get. If your business plan will exceed the 12-months then ask for what you realistically need so you don\u2019t drown in P&amp;I payments. You can also easily negotiate the prepayment penalty. I typically like to trade off a heavier PPP up front in exchange for increased flexibility towards the end. I think it\u2019s always fair for the lender to agree in writing that they will waive the entire PPP should you decide to refinance with that same bank as well.", "replies": [{"id": "iu6csoy", "text": "Thank you. I took this advice and got it in writing about the ppp.", "replies": [], "depth": 2}], "depth": 1}, {"id": "itt2w21", "text": "IMO if your concern is the rate reset of 3% over the FHLB 5-year then ask if there can be a ceiling on the interest rate as well. That could provide some certainty on your end and still allow the opportunity to refinance after the prepayment penalty has expired.", "replies": [{"id": "iu6cvlv", "text": "I tried and they didn\u2019t go for it. I do appreciate the advice tho", "replies": [], "depth": 2}], "depth": 1}]