Archive for commercial mortgage
Feb
05
Commercial Mortgage Guide Make An Informed Choice!
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A commercial mortgage loan is a loan which is secured by opting for opting using real estate as collateral to secure repayment. By taking out a commercial mortgage, you can maximize your business finance. Property can be a significant cost for many businesses. Hence, it is important to invest wisely. Commercial mortgage guide can help take a wise decision.
A mortgage is in fact, one of the best kinds of financial products. Commercial mortgages are taken out by the owners of a business to buy the warehouse, factory or office premises from where their firm operates; or to re-mortgage an existing loan on more favourable terms. They can also be taken as an investment on a ‘buy-to-let’ basis, where borrowers rent the building they’ have purchased out to a business. They are different from residential mortgages and can be sued for other things too. For instance, you can use commercial mortgages to buy a concern such as farm, pub, restaurant or care home. They can also be used to part fund a management buyout or corporate acquisition, or even to simply raise some additional working capital to help take your business forward.
There are many advantages of securing commercial mortgages. They are the best way to finance the purchase of land and buildings for your business. The repayments on a mortgage are likely to be similar to rental payments. Buying a commercial mortgage property will help you keep protected against any hefty rent rises. Moreover, you will also be able to sub-let any free space that you may have.
You can also build extensions and make conversions to your premises. Mortgage repayment schedules are agreed upon in advance and are also flexible. They are easier to manage your budget. Apart from this, interest payments on commercial mortgages, like other types of loans are also tax deductible. Commercial mortgages can also be used as repayment loans. The repayment term ranges from 15 to 20 years if it’s a new property. There are a wide range of choices in this kind of mortgage.
With a commercial mortgage guide, you can take a right decision. Commercial mortgages are specialised in nature. This is due to the fact that the lender has a legal claim over the property until the loan has been repaid in full. In fact, a commercial mortgage is the best way to finance the purchase of buildings and land for business purposes as it provides the most flexible and affordable finance solution.
Sell and Rent Back
Feb
04
Where can i get a commercial mortgage on a Leasehold Property?
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Any idea on where i can get a commercial mortgage on a leasehold property. I will have a 50% deposit on the property but would like the othe 50% as a mortgage. Also if i have a commercial mortgage can i also get a residential mortgage on another property and will this effect how much i could get?
Any information would be gratefully recieved.
thanks
Quick House Sale
Feb
03
Feb
02
Entrepreneurs, Major Issues When Shopping for a Commercial Mortgage
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Business owners that own a commercial property for their business, and have already been through the process of securing a conventional commercial mortgage, understand the complexity and frustration that is a can be a part of the process. There are a few major issues that borrowers should be aware of before selecting a bank/ lender, besides who’s quoting the lowest rate.
What is the banks current appetite for your building type, industry and geographical location? This is a difficult question to get straight answers on. If you’re dealing with a loan officer, for example (who has a quota and a commission at stake) at a local bank, they may try to “push” your loan through the system despite knowing that your deal has a low probability of closing. You’re at risk of losing months and 3rd party fees.
You need to get an unbiased opinions on how hungry the source is and what really fits their criteria. Commercial mortgage brokers, title companies or CPA’s that work with real estate related companies can be a source for this information.
An example, is in our state of Michigan. Many local banks are not offering commercial mortgages to businesses involved in the automotive industry, that have industrial buildings and or buildings that are located in metro Detroit, unless their absolute perfect deals. Borrowers run the risk of thinking they have a solid loan, going through the process, ordering expensive 3rd party reports only to get denied deep into the loan. If the borrower has a ballooning loan, they run the risk as well of defaulting on their current loan by not paying it off in time.
A very common mistake we see business owners make, is trying to leave issues undisclosed. The problem with this is that you, the borrower, almost always pays for this. Underwriters will discover the issue and will cancel your loan request.
For example, we recently closed a transaction with a borrower that did not reveal to their previous broker and lender that they had 2, 30 day late payments on their existing commercial mortgage. Not sure exactly what the borrower was thinking but they simply did not mention it. The borrower signed to commitment letter and submitted the $6,500 deposit fee for the appraisal, environmental and processing fee. All the reports were ordered and came in fine.
Underwriting than ordered the VOM (Verification of Mortgage) and it showed the late payments. The deal was immediately canceled and the borrower was not able to use the reports with the next lender… they had to reorder them which was another $5,000.
Our suggestion would be to disclose all issues in the very beginning. Move on until you find a source that you really believe can get around whatever it is, than spend your time and money with them.
Another mistake we see is that business owners assume they will get their best deals from their existing bank (that has their deposits, etc), and consequently do not shop. There is often the idea that if the business owner runs into hard times, they will be better able to work with and reason with their bank. We often hear “you have a better loan program sure, but I’ll need my local bank to back me up”. We just as often hear prospective clients say “I can’t believe my bank called my note. In 15 years that I been with them, I’ve never once been late. They said they no longer liked my industry and have called my note for no good reason”. Just like a mutual fund, it pays to be diversified.
In the same vein, many entrepreneurs also believe that all commercial mortgages are the same. There are many options, that you may not be aware of. For example, there’s a little known commercial 30 year fixed mortgagethat has rates and fees right in line with bank financing, but the loan is fixed for 30 years.
Get out there and find the best deal for your situation. Perhaps working with a credible broker makes sense, but regardless, shop and don’t assume that your existing bank has your best interest at heart, because, they have their interests at heart.
Quick House Sale
Jan
30
UK Commercial Mortgages
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UK commercial mortgages are mortgages for buying property and land for business purposes that uses the commercial property as colleteral with the lender retaining an interest in the property until the loan has been fully repaid are are available to all business types looking to borrow up to £2 million with terms available from up to 30 years and normally up to 85% LTV.
There are different types of mortgage interest rates available to borrowers;
Variable interest rate: the interest rate changes in line with the Bank of England base rate.
Fixed rate: fixed for a set amount of time, usually between two and five years. At the start of the fixed mortgage it will usually be higher than the variable interest rate.
The mortgage rate you are offered will be based on both current rates and the amount of risk to the lender.
Mortgage repayment methods include repayment mortgages, interest only mortgages, endowment mortgages and pension plan mortgages.
For more information visit UKCommercialMortgage.com
Quick House Sale
Jan
29
mortgage closing cost: credit union vs. commercial bank?
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is it true that if you get mortgage through Credit Union vs. commercial bank then your closing cost is much lower? thanks.
Repossession
Jan
21
What steps should I take to become a commercial or mortgage loan officer?
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I want to become a loan officer ASAP. I have a year of college left, and I’m majoring in Business Management Economics. Basically Economics with some accounting, some computer classes, and some management classes. What steps do I need to take to become a loan officer after I graduate in Miami, NYC, Chicago, or LA? Should I be looking at grad school right now or trying to line up a job? What about grades, how important are they? I’ll have a 3.2 GPA when I graduate, is this good enough?
Repossession
Jan
20
Specialized Business Loan and Commercial Mortgage Situations
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Two of the most specialized business financing and commercial real estate loan situations involve golf course financing and funeral home financing. These two complex business loan scenarios will be used to illustrate viable commercial mortgage strategies.
Funeral home loans and golf course loans involve difficulties not found in common business loan situations. A commercial loan to buy a business for a golf course or funeral home is among the most difficult business financing scenarios, and refinancing will probably be more difficult than the initial commercial mortgage purchase loan for buying the business.
Fewer Business Lenders – Funeral Home and Golf Course Financing
There has been a significant reduction in local and regional banks offering business loan programs for funeral home financing and golf course financing. This of course compounds the already difficult commercial loan environment for funeral homes and golf courses due to fewer commercial lenders which are willing to provide reasonable commercial mortgage terms.
Buy a Business – Business Opportunity Financing
Business financing to buy a business opportunity is a special business loan variation in which commercial property is not purchased. The land and buildings in such a situation are typically leased for ten years or more. Similar to a conventional mortgage to buy a golf course or funeral home, competitive business opportunity financing is not easy to find.
Business Loan Terms to Avoid – Funeral Home and Golf Course Loans
It is critical to avoid undesirable business loan terms when refinancing or buying a funeral home or golf course business. Particularly important terms involve the percentage of value for the commercial mortgage and the length of the commercial loan. Regional and local banks will frequently offer short-term business financing instead of a longer-term commercial loan.
Stated Income Commercial Mortgage Difficulties
Although a stated income commercial loan has a certain number of benefits in specific circumstances, the use of stated income business financing is not recommended for a funeral home loan or golf course loan. A major limitation of a stated income commercial mortgage is the maximum business loan possible. A further limitation is the low percentage of value for stated income commercial financing involving either golf course financing or funeral home financing.
Business Value and Commercial Real Estate Value for a Business Loan
For golf course loans and funeral home loans, the commercial real estate loan value is often less than the business value. This is particularly true with a funeral home appraisal. The problem with this disparity is that many business lenders will provide a business loan that includes only the commercial mortgage loan value, and this will produce significantly reduced business financing.
Funeral Home and Golf Course Financing – Avoid Excessive Business Loan Fees
Commercial borrowers should expect some legitimate and reasonable commercial mortgage fees during the initial commercial loan process. There are several commercial lenders that continue to take advantage of the severe lack of business loan choices for purchasing, building and refinancing a golf course or funeral home. One of the particularly unacceptable tactics is to charge exorbitant fees ($25,000 is not unusual) whether or not the business financing is successfully completed.
Commercial Lender Options for Funeral Home Loans and Golf Course Loans
As mentioned earlier, the supply of acceptable business lenders for this kind of business financing has been reduced. An agreeable commercial mortgage for a golf course loan or a funeral home loan will depend upon a wise lender choice.
A business borrower must be ready for the restricted number of qualified lenders for a golf course and funeral home commercial loan to buy a business. It is essential to find a lender with the resources to complete the complicated commercial mortgage process in a timely manner and concurrently avoid the business loan difficulties previously described.
Additional Business Finance and Commercial Mortgage Considerations
Even though the potential business loan problems described in this article are substantial, there are additional commercial mortgage difficulties which should be anticipated and avoided. Borrowers should plan to have early and extensive discussions with a business financing expert before proceeding with either purchase or refinancing efforts involving specialized real estate investment property such as golf courses or funeral homes.
Sell and Rent Back
Jan
19
All about Commercial Mortgages
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Businesses have their own ups and downs. Problems brought about by the nature of their business are sometimes hard to avoid. Lost of profits and bankruptcy are just one of the common fears of business owners. Saving businesses means that owners need to have several solutions in mind. This is where commercial mortgages come in. To know more about the ins and outs of these financial solutions, read the following paragraphs:
What is a commercial mortgage?
Although its name may imply a negative feeling, a commercial mortgage is just a type of loan. People get these commercial mortgages when they feel cash-strapped. In a commercial mortgage, a business (or commercial) property is used as collateral.
Loan institutions appraise the value of the collateral and evaluate the loaner’s income to determine the amount of money they can lend. Most of the time, these financial institutions also check the credit reputation of the loan applicant. So, people who intend to apply for commercial mortgages must build a good credit standing.
Although a commercial mortgage may imply that funds will be used for businesses, this has not always been the case. Borrowers still have the freedom to decide on where they will use the funds they got from the commercial mortgage they obtained.
What are the types of commercial mortgages?
Banks and other financial institutions offer various types of commercial mortgages that borrowers can choose from. As a matter of fact, people can categorize commercial mortgages according too its duration and interest types.
In terms of duration, a commercial mortgage can be a:
· Short-term loan
Also known as an interim loan, a short-term commercial mortgage usually lasts two years. Borrowers who can critically estimate the time they can pay the loan go with short-term loan as they are sometimes quicker to process. Depending on the borrower, the duration of the loan may or may not affect the amount of money that can be borrowed.
· Long-term loan
Depending on the duration of the loan, a long-term loan can also be considered as a short-term loan by some financial institutions. But as a basic rule, commercial mortgages that last for a minimum of three years are considered to be long-term loans. Property and real estate developers also offer long-term loans. In such case, they might require collateral that is of high-value.
Who should get a commercial mortgage?
As earlier stated, business owners are usually the ones who take a chance in commercial mortgages. But generally speaking, commercial mortgages are for people who own commercial properties. They just need to prove that they have the capability and resources to pay for their would-be loans.
Commercial mortgages are the easiest way out of financial problems. However, this does not mean that one should immediately jump into the option. One should bear in mind that getting a commercial mortgage is also synonymous to obtaining a responsibility—an obligation that he or she must comply to. Just like any other life encounters, the decision to get a commercial mortgage must be carefully thought of.
Sell and Rent Back
Jan
04
On a COMMERCIAL MORTGAGE, how much should I expect to pay at close?
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On an $800K commercial real estate purchase, how much would I be looking at on the settlement statement? On a $2.5M transaction, the same…?
Repossession
