Most borrowers opt for fixed rate loans in today's low-interest market, but for those willing to embrace change and play the field a bit, still-cheaper rates are available. There are state-sponsored loans for making your building more energy-efficient, for example. To shave percentage points off a loan for other purposes, there's the so-called London Inter-Bank Offered Rate (LIBOR)-based rate. Or you might consider looking into the new adjustable-then-fixed rates from Fannie Mae.
While Fannie Mae's product is new, LIBOR-loans have been around awhile and are experiencing new popularity, and state-sponsored energy loans are gaining popularity through sheer word-of-mouth.
But are co-op and condo boards embracing these new ways of borrowing? Should they embrace them? Perhaps because of their lack of experience (be it real or perceived), co-op owners are notorious for being fiscally conservative; and with interest rates as low as they've been in recent years, the conservative choice often seems a good one - to both borrowers and many lenders.
"You can get a ten-year loan right now for 6.25 [percent interest]. So why wouldn't you take a fixed-rate deal and know where your money is going to be?" asks Thomas Schissler, vice president of American Property Financing, Inc. in Manhattan. "For my money, whenever anybody asks me, I'm selling people fixed-rate product."
A simple product, at a good rate, is often simpler to agree upon, too. Explains Steven Heller, regional senior vice president of Arcs Commercial Mortgage Co., "Co-ops are slow to make up their minds. It's management by board of directors and finance. There are very few people who pull the trigger with the very first [loan] meeting."