Tweet
Hi all
I'm wanting to get a sense check of how sustainable it is to keep getting I/O lending on a commercial property to the value of $1.5m with 60% LVR.
I've been that the usual amortisation period is 15yrs. If the first loan term is I/O for 5yrs, at the end of this term the lenders could request P/I across 10yrs. If the lenders aren't interested in renewing the loan on I/O, and assuming no repayments have been missed and LVRs are still solid, how possible is it to take the loan and find another lender who would offer I/O. Could I plan on continuing to find lenders willing to fund on I/O?
How possible is it to continue to roll the lending from one I/O term to another, to maintain cashflow. Eventually (in approx 10yrs) I would like to reduce the commercial debt through selling down some residential property, but in the meantime I'm wanting to maintain high cashflow.
In residential investing it seems a lot of investors use I/O loans indefinitely to maintain cashflow and enable further investing. In a commercial environment, how many investors do the same thing?
Appreciate your views on this.
wfa
I'm wanting to get a sense check of how sustainable it is to keep getting I/O lending on a commercial property to the value of $1.5m with 60% LVR.
I've been that the usual amortisation period is 15yrs. If the first loan term is I/O for 5yrs, at the end of this term the lenders could request P/I across 10yrs. If the lenders aren't interested in renewing the loan on I/O, and assuming no repayments have been missed and LVRs are still solid, how possible is it to take the loan and find another lender who would offer I/O. Could I plan on continuing to find lenders willing to fund on I/O?
How possible is it to continue to roll the lending from one I/O term to another, to maintain cashflow. Eventually (in approx 10yrs) I would like to reduce the commercial debt through selling down some residential property, but in the meantime I'm wanting to maintain high cashflow.
In residential investing it seems a lot of investors use I/O loans indefinitely to maintain cashflow and enable further investing. In a commercial environment, how many investors do the same thing?
Appreciate your views on this.
wfa