When seeking capital financing, it’s crucial for you to understand the process of commercial real estate loan underwriting. This is usually a detailed process that takes between five to eight business days depending on the borrower. What is Loan Underwriting? Commercial real estate loan underwriting is the process by which the commercial lender examines the eligibility of the borrower. The underwriter is usually looking to ensure that the potential borrower meets their guidelines in terms of collateral, credit, debt and income in addition to other secondary guidelines as stipulated by the terms of the loan. What Is Involved In The Process Of Underwriting? During the underwriting process, the lender will assess all the paperwork that are part of the requirement of the loan including bank statements, tax returns, income situation, debt-to-income ratio and others. The aim of this is to ensure that the borrower adheres by tall the requirements that… read more →
When it comes to commercial real estate loans, every bit of information is important. Terms such as an amortization schedule, prepayment penalty, interest rate, loan term balloon terms and others are things you should understand before you sign any documents for a commercial real estate loans. When seeking a real estate funding it is necessary that you are knowledgeable of the lenders expectations so that you increase your chances of securing the ideal financing when you need it. Credit Scores Although commercial real estate loans are offered with a lien on the commercial property lenders will still put you responsible for ensuring payment. A strong personal credit score is thus integral if you need the best financing with the best rates, but you must also build up your business credit score in order for lenders to have more trust in your business. Collateral Collateral or loan security is usually a… read more →
Commercial real estate loans offer entrepreneurs an opportunity to expand, renovate, develop or purchase new business property. And there has never been a better time to take up a commercial real estate loan compared to now. The interest rates are deliciously low, credit unions, commercial banks and a plethora of private companies are all fishing for customers to give loans. Cheapest Providers of Commercial Real Estate Loans Conventional Bank Loans Commercial banks are now completing commercial real estate lenders in offering attractive commercial real estate loan rates. Banks generally consider the credit of the borrower and are given more approval for mid-size projects. The rates range from 5 to 7 percent and the rate resets after every 1-5 years for various rate loans. Hard Money Loans Hard money loans represent more than 20 percent of commercial real estate loans today. A hard-money loan is a loan that is funded by… read more →
Foreclosed homes have become a popular choice with homebuyers since they are usually offered at a discounted price. Buyers who are able to purchase the homes have an added advantage since they can bargain for an even lower asking price, and can expedite the closing of the sale. Foreclosure properties have steep competition as there are primary homeowners who are eyeing the property and there are investors who are also ready with an all-cash offer. It is important to do a thorough investigation of foreclosed homes and enlist professional help where possible to ensure that you get the best deal possible. Basics of Commercial Real Estate Loans Commercial real estate loans don’t come as a one-fits-all package. Factors such as cash-flow needs, the type of property and the income form the property will all affect the loan approval. Technically, commercial real estate loans are not secured by liens on a… read more →
A commercial project loans is a type of financing that is structured for the purpose of financing a construction package. This type of loan can be used by a small business owner, a contractor or a homeowner for construction and related expenses such as hiring employees, purchasing building materials or others. How Do Commercial Project Loans Work? The process of getting a commercial mortgage loan can be more challenging compared to other types of loan. Historically, lenders of this type of loan were almost always regional banks or the local community, but this has changed over the years. Today you can acquire this type of loan from certain insurance companies, specialty finance companies and national banks. A development project can be financed in two ways, which can sometimes be combined. The first type if the short-term financing which releases funds for the lease up phase of the project and the… read more →
Commercial mortgages come in a variety of packages. One of these is an interest-only package that has allowed millions of people to acquire property some of whom would have otherwise not been able to afford. This type of lending was in the past met with a lot of criticism which led to the plummeting of its popularity. Why Take an Interest-Only Mortgage Interest only mortgage loans are designed to allow the borrower to only make monthly payments on the interest initially, and once they have completed this, then they can pay the capital. Since the borrower does not pay off the capital debt at the beginning, the monthly payments are lowered considerably. After completing the interest-only payment period, a borrower can refinance the capital afar cheap interest. This makes this product attractive to many people since they are comfortable with the monthly payments. One may also chose an interest-only mortgage… read more →
Whether you are purchasing a property for your business or for real estate, owning your own property will be one of the best decisions you ever made in life. Commercial mortgage is a form of financing that is availed to qualified people for the purpose of purchasing property. The payment terms for this source of property loan are strict, and demand that you make the agreed monthly payments dedicatedly until you have paid off all the loan inclusive of the interest acquired. Commercial Property Loan Restructuring A commercial loan restructuring or modification is an agreement made with the lender to renegotiate the terms of the loan. This agreement offers the borrower an opportunity to decrease the monthly repayment amount, capitalize on the popular low interest rates, and extend the time period for paying off the loan. Benefits of Commercial Loan Restructuring Businesses can take advantage of commercial mortgages to release… read more →
Finding the best commercial mortgage broker is a process that needs research and knowledge on the best rates available. If you are not careful enough, you might end up getting the worst deals for your needs. The following are some things you can consider getting the best deals for improvement in your business. Expand Your Networks The best way to get the best deals on the market is to link up with the best people in the market. The realtors and lawyers are some professionals that will give you the best references. Their working environment allows them to get links to the best deals and people who are in the business. Having good relationships with the realtors and the attorney gives you a chance to get the connections they have. They will point you to the people that will give you the best deals on commercial mortgages. The Referrals Aside… read more →
Commercial mortgage loans have become an affordable option for entrepreneurs who no longer fancy renting. Whether it is for real estate or for a business premise, the advantages that this simplistic type of financing far outweigh those of renting. Merits of Commercial Mortgage Maintains Cash Flow Within the business The design of a commercial mortgage loan is simple, you make the agreed monthly payments with interest factored in, until you complete the principal amount borrowed plus interest. The product focuses on the short-term and by so doing correlates the long-term funding to your long-term income. The cash in the business is not tied to the long-term asset and thus remains in the business in liquid form. Make your dream a reality If you take up a commercial mortgage loan with your business name, it is the business that will be making the payments although you are still responsible for ensuring… read more →
In the current low-interest rates ecosystem, coming up with borrower-friendly interest is very difficult. An attractive First Position Commercial Mortgage Notes put the lender in the First Position referring to the lender as the rightful owner of the property and therefore provides security for the lender’s investment. Commercial Mortgage loans vs. Residential Mortgage loans Commercial loans are by far different from residential loans. When it comes to residential loans the lender inquires of the borrower’s financial history over the past two year – in terms of credit history, tax returns, and bank statements. The loan majorly focuses on a borrower’s ability to make monthly payments on the loan. Whereas in commercial loans, the lender observes the property and check whether the business will be able to pay the loan from it daily operations. The lender will request for copies of the companies two-year trading history. In that way, the lender… read more →
