Lines of Credit for Mixed Use Property
Lines of Credit for Mixed Use Property: What You Need to Know
A line of credit (LOC) is an agreement between you and a lender to establish a maximum loan amount that you have to maintain. You can draw from this pool at any time you need cash, as long as you don’t exceed the maximum credit limit.
LOC for Mixed Use Properties
It is possible to establish a line of credit for your mixed use property. The lender uses your property as collateral to give you this loan. Here, you borrow what you need and go back for more whenever need arises. For such a property, the maximum amount you can draw is $750.
The lender looks at your loan-to-value (LTV) ratio before approving the LOC. You need a maximum LTV of 50 percent to qualify. Anything higher and your application is rejected.
The Draw and Repayment Period
The lender allows you a draw period of 5 years. This simply means you can use the LOC during this period. The good news is that you don’t pay any interest on the unused LOC, which makes it cheap.
The draw period is 15 years at a fixed rate. Here, you pay part of the principal and the interest monthly at a fixed rate in 180 instalments. A fixed rate helps you evade high payments due to inflation and market changes.
The lender might give you the loan, but charge you more. You find that you pay high mortgage insurance, hidden fees or even have your loan extended. This makes the loan expensive for you.
Take Advantage of Expert Help Today
At Mixed Use Mortgage, we pride ourselves in creating opportunities for borrowers like you. We have taken the application process and tailored it for your convenience. We know that making a decision is tough at times. We also know that some barriers make it hard for you to fulfill your goals. But with our services, you don’t have to worry about these two aspects of lending, because we take care of everything for you.
Don’t hesitate to give us a call and discuss your options, consultation is free and never a fee.