Car Prices and HOA Loan Rates
Do all Honda dealers sell similarly equipped Accords for the same price? One dealer may obtain steeper discounts by buying larger quantities of cars. Another may negotiate more aggressively with distributors. Perhaps one dealer has no lien on their building and very low overhead. Yet another simply requires a lower profit hurdle on new car sales. In other words, there can be more than one reason that the same product is offered at different prices.
Banks are unique
Like car dealers, banks have unique characteristics. Some banks have a low cost of funds due to their large deposit base. Another bank may offer an aggressive loan rate because they operate in markets with low loan demand. Some banks have higher overhead ratios. Some banks intentionally price certain deals with higher rates to politely discourage the borrower from accepting their deal.
The bottom line is that banks are for-profit organizations. They each have their own model for making money. That is why the can have such differing loan terms.
Seek out expertise
What are the odds that the bank that your HOA uses for a depository is also the most aggressive lender in the market for HOA loans? Most likely the odds are the same that the Honda dealer that is conveniently located across the street has the best price in the country on a Honda Accord. While this is certainly possible, the only way to know for sure is to compare.
Arch Capital Solutions can make these comparisons as an advocate for your HOA. We have relationships with lenders throughout the country who specialize in HOA loans.
In many states, the board may actually have a fiduciary duty to make financial decisions that are in the best interest of their members. Arch Capital Solutions can satisfy those fiduciary duties acting as the HOA’s financial advisor. We help HOAs obtain financing and choose the best proposal from multiple lenders.