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2ND
Trust Deeds – 2nd TD loans are generally higher leverage
loans with a higher interest rate and more points than a 1st
TD loan. 2nd TD loans are subordinate loans and are
considered to have more risk because of their higher
leverage and subordinate position. Therefore 2nd TD lenders
are compensated for this added risk with higher interest
rates and points.
Whereas a 1st TD
lender would lend 65% loan to value at 6.25% and 1 point on
an apartment building a 2nd TD lender would lend up to 75%
loan to value but may charge 13% and 6 points.
Example:
An office investor finds a property they want to add to
their portfolio but they find they only have enough cash to
put down 25% would obtain a 2nd TD behind a typical 1st TD
office loan.
If you
require additional information, or would like to speak
to one of our commercial financing specialists, please call
us at 888.488.3807 or
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