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The debt markets have changed significantly since the Fed began raising interest rates in early 2022. As a mortgage broker, I\u2019ve seen deals repriced, paused and\/or die as a result. Still, we continue to close loans by embracing a strategic perspective that fits the current environment.<\/span><\/span><\/span><\/p>\n The best financing execution is one that focuses on future goals and what can be controlled by the borrower.<\/span><\/span><\/span><\/p>\n A case study will help illustrate this. We recently closed a loan fitting the following profile:<\/span><\/span><\/span><\/p>\n The borrower\u2019s ask was as follows:<\/span><\/span><\/span><\/p>\n The resulting loan met most objectives. I focused on sub-6% rate, open prepayment, cash out. We closed a loan that included recourse and featured less interest only than we requested.<\/span><\/span><\/span><\/p>\n Could we have gotten non-recourse elsewhere? Sure, CMBS loans are non-recourse by nature. However, in dissecting what it actually did for this borrower, it was decidedly less important than other loan features; namely a significant interest rate premium.<\/span><\/span><\/span><\/p>\n Instead, we locked an interest rate well below anything else we were quoted, with open prepayment and significant cash-out. We can\u2019t control future rate movement; but with open prepayment, the borrower can refinance quickly and without penalty if rates drop. The interest only period was brief but hit a sweet spot without impacting pricing. By being thoughtful about what was most important now and going forward, we pulled together a market leading execution.<\/span><\/span><\/span><\/p>\n C<\/u><\/i><\/span><\/span>ontact<\/u><\/i><\/span><\/span>:<\/span><\/span><\/span><\/p>\n\n
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