quadrupledeac
Active member
I need help choosing the best way to finance our group's new office building.
Loan amount is $1, 275, 000.
Option one is 10 year LIBOR + 2.5% with minimum of 3.25% until rate swap is executed.
Option two is 10 year fixed at 4.5%.
My partners who are more seasoned (read old) prefer option one. I, the relative ignoramus on matters of finance, prefer the conservative nature of a fixed rate loan. I also have heard reports of the impending crisis with so called zombie loans in the commercial real estate world and wonder what effect that will have on adjustable rate mortgages going forward.
Would appreciate any thoughtful advice from those in the know as well as a "interest rate swaps for dummies" cliff notes version.
PS- The reason I am not just calling our banker about this is because I think he is a jackass and I have more faith in the Deacon bankers of the pit.
Loan amount is $1, 275, 000.
Option one is 10 year LIBOR + 2.5% with minimum of 3.25% until rate swap is executed.
Option two is 10 year fixed at 4.5%.
My partners who are more seasoned (read old) prefer option one. I, the relative ignoramus on matters of finance, prefer the conservative nature of a fixed rate loan. I also have heard reports of the impending crisis with so called zombie loans in the commercial real estate world and wonder what effect that will have on adjustable rate mortgages going forward.
Would appreciate any thoughtful advice from those in the know as well as a "interest rate swaps for dummies" cliff notes version.
PS- The reason I am not just calling our banker about this is because I think he is a jackass and I have more faith in the Deacon bankers of the pit.