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Here is a thread on how to negotiate loan terms:
Loans:
Lets start with how to negotiate loan terms.
The first thing you get back from a bank is a term sheet. This outlines the term of your loan.
It is important to note that this is just the first step of the loan terms.
Lets start with how to negotiate loan terms.
The first thing you get back from a bank is a term sheet. This outlines the term of your loan.
It is important to note that this is just the first step of the loan terms.
After you& #39;re further along in the loan process the loan will go to committee.
In committee they will look over the term sheet and take a second look at the numbers as a group.
It is important to note that your loan terms never get better going into committee.
In committee they will look over the term sheet and take a second look at the numbers as a group.
It is important to note that your loan terms never get better going into committee.
So you want better loan terms.
The first step is options. If this is your first time getting a loan what you must do is reach out to 15 or so local banks depending on how many are in your area.
The first step is options. If this is your first time getting a loan what you must do is reach out to 15 or so local banks depending on how many are in your area.
When all the term sheets come back look at each individually. There will be different options usually. X rate for 5 year money or x rate for 10 year money.
You must decide on which is your best loan based on your personal criteria.(How long you want the loan etc...)
You must decide on which is your best loan based on your personal criteria.(How long you want the loan etc...)
After you pick the best term sheet based on YOUR parameters its time to play them off each other.
Take the best 5 term sheets you got and call all those banks and say "My best term sheet gave me this. What can you do for me to get closer to these terms"
Take the best 5 term sheets you got and call all those banks and say "My best term sheet gave me this. What can you do for me to get closer to these terms"
This is really all you have to do. It is quite easy.
Some banks will work with you to get closer to your most favorable term sheet. Some wont.
The more experienced you are the easier this process becomes.
After a while you will have a network of banks.
Some banks will work with you to get closer to your most favorable term sheet. Some wont.
The more experienced you are the easier this process becomes.
After a while you will have a network of banks.
Hope you enjoyed and please ask some questions in the comments below
