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Commercial Loan Rates, Scattered and Unpredictable

Borrowers are constantly trying to figure out what is going on with commercial loan rates. The answer to this question is completely scattered. We are seeing rates come in on the same loan request with a 200 – 400 basis point difference… And what we are talking about here is loans less than five million and non multifamily. Plain old retail, industrial, office, etc, that are either rented out to a “mom and pop” or are occupied by the borrowers business. Commercial loan rates now range from 4.75% to 7.5% for most deals. This is obviously a huge range and let me clarify the 4.75%. This is only on a quarterly adjustable rate. Normally tied to Prime, which as of this writing is at 3.25%. In addition, this is only for owner occupied properties. For owner occupants that want a fixed rate, meaning 3 -5 years, they should end up being in the mid 6% to 7%’s.This comes as a shock too many borrowers who are listening to the media discuss how low residential rates are. Commercial rates in general are up by 200 basis points or more than residential counterparts and getting fixed rates is becoming harder on a weekly basis. Many banks are leading with adjustable rates with a “take it or leave it” attitude.  Investment properties are an entirely different story. On this side of the business the real carnage is starting to show itself. Rates are not even a questions. It’s really “will this loan really close.” Will it really fund? We are seeing loan to values drop to 50 – 60% with most banks, coupled with property values declining. Value is killing many, many deals.Other issues like debt coverage ratios and minimums on lease term being extended to 5 years, is hurting a lot of requests. Many banks are literally underwriting the file based on the borrower other source of income. If they can’t carry the debt, if the tenant goes away, it won’t close.   Assuming the request is one that fits borrowers should expect commercial loan rates in the mid to upper 6%’s to low 7% on a 5 year fixed, 25 year amortization schedule. Borrowers that are in a position to wait for a year or two, should. When the market returns and it will, borrowers will have more options and more control of their situation. Until than commercial loan rates will be random and scattered. 

Shoe Repairs And Several Other Things When I Was 7

Shoe Repairs And Several Other Things When I Was 7
My Dad repaired most of our shoes believe it or not, I can hardly believe it myself now. With 7 pairs of shoes always needing repairs I think he was quite clever to learn how to “Keep us in shoe Leather” to coin a phrase!

He bought several different sizes of cast iron cobbler’s “lasts”. Last, the old English “Laest” meaning footprint. Lasts were holding devices shaped like a human foot. I have no idea where he would have bought the shoe leather. Only that it was a beautiful creamy, shiny colour and the smell was lovely.

But I do remember our shoes turned upside down on and fitted into these lasts, my Dad cutting the leather around the shape of the shoe, and then hammering nails, into the leather shape. Sometimes we’d feel one or 2 of those nails poking through the insides of our shoes, but our dad always fixed it.

Hiking and Swimming Galas
Dad was a very outdoorsy type, unlike my mother, who was probably too busy indoors. She also enjoyed the peace and quiet when he took us off for the day!

Anyway, he often took us hiking in the mountains where we’d have a picnic of sandwiches and flasks of tea. And more often than not we went by steam train.

We loved poking our heads out of the window until our eyes hurt like mad from a blast of soot blowing back from the engine. But sore, bloodshot eyes never dampened our enthusiasm.

Dad was an avid swimmer and water polo player, and he used to take us to swimming galas, as they were called back then. He often took part in these galas. And again we always travelled by steam train.

Rowing Over To Ireland’s Eye
That’s what we did back then, we had to go by rowboat, the only way to get to Ireland’s eye, which is 15 minutes from mainland Howth. From there we could see Malahide, Lambay Island and Howth Head of course. These days you can take a Round Trip Cruise on a small cruise ship!

But we thoroughly enjoyed rowing and once there we couldn’t wait to climb the rocks, and have a swim. We picnicked and watched the friendly seals doing their thing and showing off.

Not to mention all kinds of birdlife including the Puffin.The Martello Tower was also interesting but a bit dangerous to attempt entering. I’m getting lost in the past as I write, and have to drag myself back to the present.

Fun Outings with The camera Club
Dad was also a very keen amateur photographer, and was a member of a camera Club. There were many Sunday photography outings and along with us came other kids of the members of the club.

And we always had great fun while the adults busied themselves taking photos of everything and anything, it seemed to us. Dad was so serious about his photography that he set up a dark room where he developed and printed his photographs.

All black and white at the time. He and his camera club entered many of their favourites in exhibitions throughout Europe. I’m quite proud to say that many cups and medals were won by Dad. They have been shared amongst all his grandchildren which I find quite special.

He liked taking portraits of us kids too, mostly when we were in a state of untidiness, usually during play. Dad always preferred the natural look of messy hair and clothes in the photos of his children.