Low interest rates heighten appeal of buying a building for your business
by IBR Contributor
Published: July 12,2010
Time posted: 5:00 pm
Tags: Commercial Real Estate, financing
Danny Lawson
Dolan Newswire
With interest rates down to a level not seen in years, businesses interested in financing or refinancing an owner-occupied facility may be able to save thousands of dollars a year on their largest fixed cost.
Owner-occupied professional offices, medical buildings, and retail/industrial warehouses are typical examples of properties that will benefit the most from today’s lower rates.
While most qualifying facilities are used entirely by the borrower, “owner-occupied” doesn’t mean the door must be closed to other occupants. Banks usually allow an owner to lease as much as 49 percent of the premises to a paying tenant.
Why buy?
If your business is currently leasing facilities, ownership could reduce your costs. Mortgage interest is generally deductible as a business expense, but check with your tax advisor to make sure this applies in your situation.
As your own landlord, you’ll also have more flexibility and independence in making decisions. Perhaps most satisfying of all, you’ll have the freedom to buy or build exactly what you need.
Choosing a loan that suits your cash flow
Financing on newly purchased or constructed owner-occupied real estate is typically based on a maximum 80 percent loan-to-value ratio.
Owner-occupied real estate loans generally fall into two categories: full-term amortization, or balloon financing. Either one can give you interest-rate protection for as long as seven years.
Full-term loans are often based on 15-year amortization. Many owners choose rate adjustment every five years, but protection for one, three, or seven years is also available. At these intervals, the rate resets to a certain margin over the current yield on comparable Treasury securities.
Balloon loans typically have a fixed rate for five or seven years, with amortizations up to 20 years. A balloon payment is due at the end of the rate-protected term. At that time, the owners can apply to renew the loan at a new fixed rate and term.
If you’ve been thinking about buying, building, or refinancing business facilities, today’s low interest rates could make this the perfect time to act.
***
Danny Lawson, a vice president in Bank One’s Business Banking Group, is area manager for Oklahoma City. He may be reached by phone at (405) 231-7283 or via e-mail at danny_b_lawson@bankone.com.
![[Print]](http://idahobusinessreview.com/wp-content/plugins/tdc-sociable-toolbar/print.png)
![[Email]](http://idahobusinessreview.com/wp-content/plugins/tdc-sociable-toolbar/email_2.png)
![[RSS Feed]](http://idahobusinessreview.com/wp-content/plugins/tdc-sociable-toolbar/rssfeed.png)
![[del.icio.us]](http://idahobusinessreview.com/wp-content/plugins/tdc-sociable-toolbar/delicious.png)
![[Facebook]](http://idahobusinessreview.com/wp-content/plugins/tdc-sociable-toolbar/facebook.png)
![[Twitter]](http://idahobusinessreview.com/wp-content/plugins/tdc-sociable-toolbar/twitter.png)
July 12th, 2010 at 6:24 pm
[...] Idaho Business Review » Blog Archive » Low interest rates heighten appeal of buying a building for… idahobusinessreview.com/blog/2010/07/12/low-inter…n-appeal-of-buying-a-building-for-your-business/ – view page – cached * Home > News, Real Estate > Low interest rates heighten appeal of buying a building for your business Tweets about this link [...]
July 12th, 2010 at 8:01 pm
[...] Read the rest of this great post here [...]
September 18th, 2010 at 10:31 pm
Healthy diet plan…
Super perform as well as fantastic web site, thank you expressing….
October 28th, 2010 at 4:03 am
I really enjoyed your website and will bookmark it!
November 7th, 2010 at 2:07 am
Thank you……
It抯 so lucky for me to find your blog! So shocking and great! Just one suggestion: It will be better and easier to follow if your blog can offer rrs subscription service….
November 8th, 2010 at 2:37 am
Thank you……
Appreciation pro the suggestions and references information’s….
March 12th, 2011 at 1:53 am
Another Title…
Why Credit Card Applications May Be Denied…
March 14th, 2011 at 10:38 am
really agreed with what they were saying and thought I would share it with you all…
was surprised by this so thought I would share it with my readers…
April 27th, 2011 at 2:21 pm
görüntülü sohbet…
canlı sohbet…
April 28th, 2011 at 3:22 pm
Ayirma Sogutma Buyusu…
MEDYUM…
April 29th, 2011 at 5:45 am
kral oyun oyna…
yeni oyunlar…
May 2nd, 2011 at 2:07 pm
beyaz eşya kampanyaları…
beyaz eşya, çeyiz seti,…
May 3rd, 2011 at 1:48 pm
Lida…
lida zayıflama, lida zayıflama hapı…
May 3rd, 2011 at 3:38 pm
Fx15…
Fx15, Fx15 hapı…
May 4th, 2011 at 2:05 pm
Biber hapı…
Biber hapı, biber kapsülü…
May 4th, 2011 at 2:11 pm
lw6090…
lw6090,lw6090…
May 7th, 2011 at 4:49 pm
vpills…
vpills…
May 20th, 2011 at 8:46 am
naturally like your website but you need to test the spelling on quite a few of your posts. Several of them are rife with spelling problems and I in finding it very troublesome to tell the truth then again I’ll surely come back again. low cost auto insurance california
May 27th, 2011 at 2:59 pm
online casino united states…
online casino united states…
June 5th, 2011 at 3:48 pm
usa online casinos…
usa online casinos…