What really goes into commercial real estate after the “For Lease or For Sale” sign goes up? In this episode, we’re taking you behind the scenes of CRG’s Commercial Real
Risk Rate Relationship
Dated: October 9 2017
Views: 13
- Loan amounts – conventional mortgages above conforming limits as set by Fannie Mae and Freddie Mac are considered jumbo loans and generally have a higher interest rate.
- FICO score – the lowest interest rate is reserved for the highest score; the lower the score, the higher the rate the borrower will pay.
- Occupancy – borrowers occupying a home as their principal residence are considered a better loan risk than second homes and investment properties.
- Loan purpose – purchase transactions generally have the lowest interest rate with refinancing for better rates and terms being priced slightly higher. An even higher rate might be charged for refinancing and taking cash out of the property.
- Debt-to-Income Ratio – a borrower’s monthly liabilities divided by their gross monthly income develops a ratio that helps lenders to assess the borrower’s ability to repay the mortgage.
- Property Type – some types of property are considered higher risk than others which could adversely affect the rate.
- Loan-to-value – the lower the percentage of the loan to the appraised value of the property will generally lower the interest rate.
Christi Reece
Christi Reece, founder and CEO of The Christi Reece Group, has been a leader in Western Colorado real estate since 1992 and has specialized in the Grand Junction market since 2002. Raised in a real e....
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