There is more to the gravity of commercial real estate loans Texas than just the dollar amount. Using a few tips can help you to be more prepared and more successful when submitting a loan application.
Preparation will have a huge impact on the success or failure of an application for commercial real estate loans Texas. There are a lot of important factors that you will need to prove to the lender to be approved. The first is that you have a well-documented and stable cash flow. This is going to assure the lender that you have and will continue to have the means to make the loan payments. In addition, you will need to provide documents showing your assets and liabilities, and previous tax information for several years. This is going to speak to the longevity of the business as well as its financial stability and ability to weather a variety of economic conditions.
Even if you have a great relationship with your current bank, you will want to broaden your search for lenders for commercial real estate loans Texas. Knowing a banker is always helpful but in the case of commercial real estate loans Texas, it could be more important to select a lender who is better suited to your commercial needs. If you are looking for a small to medium sized loan but you are currently using a large national bank, then they might not be the best choice for a commercial loan. And likewise, if you are banking with a local or regional bank but need a very substantial commercial loan then they might not be able to meet your needs for the loan. Matching the lender to your specific request can take some time but the effort will pay dividends in the speed of processing and the overall quality of the customer service experience.
Understand the Risk a Commercial Loan Represents
There are many reason that a commercial loan is more risky for the lender. Understanding those risks and how it will impact your loan terms is important. First, commercial property values can fluctuate more and more rapidly than residential property values. For that reason, the lender will insist that the buyer make a larger down payment. This creates instant equity and ensures that the property, the collateral on the loan, will always have a value greater than the loan balance. Second, businesses are more susceptible to economic trends than consumers so lenders want to know that commercial borrowers are fully vested in the property due to the large down payment. And because the loan is a greater risk, the lender is going to charge a commercial borrower a higher interest rate. So even with very good credit, you will pay higher interest on a commercial mortgage than you would on a residential mortgage.
Complete Your Due Diligence
Before you decide to purchase a commercial property it is important that you learn about the commercial lending process, the criteria for loan qualification and the terms specific to commercial mortgages. In addition you will need to research the commercial real estate in your area to learn about what is available and the current market trends. All of this information will help you to make a good financial decision.
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.