Tag Archives: commercial mortgage

Securing A Commercial Mortgage in Texas – Preparing For Your Mortgage – Step 1 – Pre-qualification

November 3, 2017Uncategorizedcommercial mortgage, commercial mortgages in texas, texas commercial mortgage, texas commercial mortgage brokersbigdaddydennis

Venturing into the commercial real estate market is not something to be taken lightly. The process can be long and stressful, especially if you are not properly prepared. When you are seeking a commercial mortgage in Texas, there are a number of steps to take before you are going to be able to secure funds.

Before the official paperwork even begins, most lenders prefer to have potential borrowers go through a pre-qualification process. Not only does this ensure that the borrower is both serious about pursuing a mortgage, but it also helps lending institutions determine the direction that they want to go with the commercial mortgage, especially in competitive markets like Texas.

In many cases, the pre-qualification process consists of some basic questions about your goals and your basic finances. Many lenders actually have this process online, so it can be completed at your convenience. It is important to answer the questions on this pre-qualification application as honestly as possible, even if you do not have to back it up with financial statements right away. Again, this is process is not only to determine whether or not you can handle a loan, but also to justify which type of funding would work best for you and your commercial property.

There is also the instance of a lender reaching out to you, saying that they have already prequalified you. While this is more common with basic commercial loans for small businesses (remember, many lenders make money off of fees and interest rates, so it is in their best interest to have as many customers as possible), it does happen with commercial mortgages, especially if you have already received one or applied for one. If you have already been pre-qualified, you will still have to go through the application process to definitively determine if you qualify for the loan.

For some lenders, just the application and some basic questions are enough to begin the process of a formal application. For others, further documentation will be required. This can be anything from the previous two months bank statements to tax documentation going back two to three years. You might also have to prove additional income by disclosing investment properties or other assets. The larger the commercial loan you are attempting to acquire, the more documentation you should expect to provide up front.

What happens after I submit my pre-qualification application and documentation for my commercial mortgage?

Once all of the documentation is gathered and submitted to the lender, you will usually have an answer as to whether or not you are qualified pretty quickly. Often times it is even the same day. If you do this online, you can expect to know the answer, and hear from a representative, within 24 hours. In person, this process might go even more quickly as your documentation will be reviewed by a live person while you are present. After you are pre-qualified, the lending agency will then begin to move you through the formal application process of a commercial mortgage.

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.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Be Prepared and Know All of Those Expectations When Looking at Commercial Mortgages

October 30, 2017Uncategorizedcommercial mortgage, commercial mortgage broker, commercial mortgage lender, commercial mortgagesbigdaddydennis

Just like with every big financial decision, when applying for commercial mortgages, it can be very scary, intimidating and stressful. But the more research you do and the more you know, the more likely that your applications efforts will be successful.

The whole process when it comes to applying for commercial mortgages is obviously less than thrilling and actually dreaded by many. But you can take all of the agony out of the process by being prepared and knowing what to expect. First, it is good to know what a letter of interest from a lender is. Remember, it is not always a commitment like you think it maybe. It is actually just a letter listing the terms of the deal. These terms can change until finalized. At first, the letter of interest is usually very simple with just a small amount of information for both parties to review.

But adjustments to a letter of interest is sometimes necessary. Most of the time, these changes usually include adjustments that are part of the final terms. These adjustments could go either way and could negatively or positively impact the borrower. So, that is why it is so important to always keep the line of communication wide open during the entire process and to know where everything stands throughout the application period.

Also, keep in mind that commercial mortgages will most likely take a lot longer to process compared to residential. The expected time frame for an application from the time of approval to closing time is around six or twelve weeks. When it comes to a residential loan, those usually only take half the time range, taking anywhere from three to six weeks from application approval to close. But it is important to keep in mind that many variables will play a part in the timeline.

Know that lenders are there when you need them for commercial mortgages, but they can’t control the actions of third parties that they may work with

It isn’t uncommon for lenders to use third-party companies to complete reports during the entire process. But keep in mind that the revelations or opinions that are provided in these reports by the third parties is completely out of the lenders control. The third parties usually will have a time frame that the reports need to be completed in, but again, as long as they’re done in that specified time frame, lenders have no say in the amount of time it takes for them to process these reports.

The commercial mortgages application process doesn’t have too many differences compared to other loan applications

It is best to stay calm and try to not be too scared when it comes to applying for commercial mortgages. The application process is actually very similar to other loan processes, so don’t stress too much. Just make sure to do your research and know what you are doing before making any final decisions. Also keep an open communication line at all times so you know what to expect throughout the whole process.

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The Benefits and Things to Consider When It Comes to Commercial Mortgages

October 30, 2017Uncategorizedcommercial mortgage, commercial mortgage broker, commercial mortgage lender, commercial mortgagesbigdaddydennis

There might not be too many reasons for commercial mortgages, but there are many advantages to using them. Mortgages can be used for buying land, developing new properties or even extending renovations on current premises.

Commercial mortgages are given many different repayment options to borrowers. These types of mortgages often come with much lower interest rates along with several different options for choosing fixed monthly payments. This will help you get more of an idea and give you more certainty on how to forecast your financial future because you will know what to expect to pay each month. This can become very helpful when planning your long-term financial goals.

Fixed monthly payments can really help you when it comes to preparing for your future financial and business plans. Usually these fixed monthly payments last for quite a few years so you will be able to focus on more important aspects with your business instead of having to worry about payment fluctuations.

Also keep in mind that commercial mortgages can be used as great potential for capital growth and monetary gains. Since property values only continue to rise, it is smart to look at some of these properties for long term investments. There happens to be a lot of investment opportunities for some properties at the moment and if the property values continue to increase, then now is the time to invest.

But still beware of some disadvantages when it comes to commercial mortgages

It may sound like a good idea to time, but commercial mortgages might not always work for you and your business goals. Don’t just take a deal because it is a good deal. Lower interest rates are always a good sign, but many times a lower interest rate may require a hefty deposit. This means that a substantial amount of money needs to be used to be put down on the property. Also, when owning a property, then you are the one responsible for the general upkeep, any security that is needed and also any maintenance that is required.

For your commercial mortgages to be successful, you need to pay attention and continuously converse

There are many factors that you want to consider before making any financial decisions. Also, be sure to be well aware of your repayment options and pay attention to the interest rates along with any higher deposits that may be required. It is important to keep in mind that you are now responsible for the upkeep of the property to maintain or even increase its property value. It may seem like a lot of work at first, but if executed right, all of the work will lead to a large investment opportunity.

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How to Prepare for Commercial Mortgages

October 18, 2017Uncategorizedcommercial mortgagebigdaddydennis

There are many steps that you need to take before you begin your search for commercial mortgages. Following a well thought out plan can make your process less stressful and much more successful.

As you prepare to purchase a commercial property there are many steps that you should follow before you submit your loan application. Securing commercial mortgages can take a long time and errors during the process will only make it take longer. But having a strategic plan to follow will help you to avoid any issues that will add more time to the already lengthy process. Your first goal should be learning about the process associated with commercial mortgages including the application process and requirements, the approval process and the terms that you will have outlined in your loan agreement. The more knowledge you have the less difficult and stressful the process will become.

Part of your research will entail learning about the potential lenders that you could be doing business with. Because commercial mortgages are so large and sometimes difficult to secure, many borrowers look at the lender as some larger than life entity. This perspective can make then seem very intimidating. But you need to view the lender as a strategic partner or supplier and nothing more. They are providing you with a service, a loan, and you are simply doing business with them. In a way they should be catering to you as you are their potential client. Fear or intimidation is never useful. Simple professionalism and respect are all that is required to begin to build a successful, professional relationship with a lender.

Going one step further, as you speak to prospective lenders, be honest with them about the financial health of your business and also about your personal finances. Giving them accurate information will allow them to provide you with the most helpful and useful information as you begin to evaluate who might be your best choice as a lending partner.

Invest Your Time in the Process

Understand that as you are getting to know the lenders, they are also getting to know you. In many cases, especially with a first commercial loan request, lenders need to gather a great deal of information. Your business might not have a long financial history so the lender will be basing a large part of the decision on you as the owner. That means that the lender will want to learn more about you than what the numbers on your financial statements can tell them. Don’t be afraid to tell your story and explain why you started your business, how you have managed to grow it to a point where you are looking to purchase a commercial property and what your goals are for the future.

More than Just an Application

It is important for you to remember that there is much more to securing a commercial loan than just successfully completing the loan application. This is a very important step for your business and one that you should prepare for carefully. Having a good understanding of the process and what you need to demonstrate to qualify for a loan will ensure that you are successful in finding the right lender and the best loan to meet your needs.

Dennis Dahlberg
Broker/RI/CEO/MLO
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.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

The Cons of Having Commercial Mortgages and How to Avoid Them

October 16, 2017Uncategorizedcommercial mortgage, commercial mortgagesbigdaddydennis

Even in today’s technological world of internet-based companies, there is still a vast need for brick and mortar businesses. When it comes time to obtain commercial mortgages on building for your company, it’s important to be aware of some of the risks and downsides, so you can try to avoid these pitfalls.

Finding a “home” for your business is a thrilling part of any new or growing business. The location, the building itself and many other factors go into how you will select the property you decide upon. And when you finally move from being a renter to an owner… that is a very unique feeling. However, even if you have a popular product or successful business, there are some things you need to consider when it comes to purchasing property and taking on commercial mortgages for your company.

First of all you will be responsible for more than just your monthly mortgage on your new property. You will likely be responsible for a sum of the property upon initial purchase. For many small businesses, coming up with the cash to front this initial down payment can really put a crimp in their budgets. Typically, about a fifth of the value of the property will be required of you as the business owner.

In addition to your usual business costs, there will also be plenty of other additional expenses associated with your new commercial mortgages. These expenditures can come in to the form of marketing your new brick and mortar store or new location. You also may need to hire more people, which means your payroll just went up.

Sometimes just renting is the way to go as opposed to owning and having commercial mortgages.

As a renter, you are typically not responsible for much more of a down payment beyond the first and last month’s rent. As a renter you may also have the benefit of having a property manager to fix and repair building issues that as a building owner, you would be financially responsible for. There is some additional risk associated with ownership in the case of a natural disaster that could potentially put you out of business for some time as you fix the issues and eat the cost of any inventory lost as a result.

A final “downside” to owning a property versus renting is the commitment that you might not be able to get out of.

Once you purchase a property via a loan, it’s yours and you have to commit to repaying that loan for as long as the terms specify. Even if your company hits a slow patch or even goes out of business, you are responsible for paying the mortgage on that property. While you can try to sell the property, that can take time and you may not be able to get the value of the property that you need to be able to repay the loan. While there are some “cons” to consider, there are also many benefits of owning your own property, such as earning equity. Weigh your options before deciding to take on a mortgage for your business, or just rent.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Learn to Think Like Commercial Lenders

October 11, 2017Uncategorizedcommercial lenders, commercial mortgagebigdaddydennis

Securing a commercial mortgage is never an easy process. But you can greatly increase your odds of an approval by learning what commercial lenders are looking for on loan applications.

The more you investigate the process of securing a commercial mortgage the more that you will learn that each lender has a few unique items that they are looking for on a loan application. But you will also find that there are some important pieces of information that all commercial lenders will be interested in. Learning what these key qualification criteria are and how to best present them can have a huge impact on how successful you are when seeking a loan.

Commercial lenders need to make a decision about you and your business without really having any personal experience working with you. So they are going to rely heavily on your credit history to determine how seriously you focus on repaying your debt. This resource lets them used the experiences of those who have worked with you in the past and learn from them. All lenders are going to take a hard look at your credit history and place a great deal of importance on it. So be sure that your credit history tells a story of strong payment history and diligent work to remain current on your debt.

Your ability to repay the loan that you are requesting is also paramount to commercial lenders. They want to know that you have the cash flow to make the payments now and that your business will remain strong and continue to have the ability to make payments. To demonstrate that you meet this criteria, you need to show that you have good cash flow currently and also that your projections show continued or even increased cash flow for the future.

Another factor that is important when requesting a loan is the value of the collateral that you are offering. In most cases the collateral will be the property that you are purchasing but in other cases it could be your inventory, equipment or another property that you own. Be sure that the current market value of your collateral, whatever it may be, has a value in excess of the loan that you are requesting. In most cases you would need the collateral to hold about 120% of the value of the loan that you are requesting.

Numbers Are Not Everything

All lenders are also going to want to know more about the person whom they are potentially going to be doing business with. They want to know that you have a strong sense of responsibility and that your character is impeccable. They need to know more than just your net worth and who you have borrowed from in the past. Take the time to tell your story, how you decided to start a business and how you have managed to grow it to the point where you are currently. Also explain your vision for the future and how you plan to reach your goals.

Demonstrate Your Professionalism

You know that along with the loan application, you will need to submit a small mountain of documentation. Having that packet prepared and in a professional format shows potential lenders your level of professionalism, how well prepared you are and that you invested the time to learn about the process and the required documentation. Understanding what a lender is looking for and why will help you to be more prepared and more successful when applying for a loan.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Commercial Mortgages: are high priced deals masking a decline in New York City commercial real estate?

October 11, 2017Uncategorizedcommercial mortgagebigdaddydennis

Are unusually large commercial mortgages masking a decline in mortgage origination in New York City? Two large deals represent the bulk of sales in the second quarter. Without these deals the numbers would indicate a decline in the commercial real estate sales in New York City.

This year has seen an increase in high value mortgages in Manhattan. Deutsche Bank has been at the forefront for many of these loans. Its activity in the second quarter gave it an 8 percent share of the commercial real estate market in the city. The group was the principle originator for the high value mortgages that defined the second quarter. Deutsche was primarily responsible for the 2.3 billion dollar refinance deal of the GM building at 767 Fifth Avenue and the 1.2 billion dollar purchase of 245 Park avenue by Chinas HNA group. These two deals alone represent a massive share of the 5.6 billion in commercial real estate deals that closed in the second quarter.

Data indicates that the New York City commercial real estate market is being propped up by these large loans. The top 5 mortgage originations so far this year have accounted for 20 percent of all commercial mortgages. A steep increase when compared to 2016 and 2015 when large mortgages represented 13 and 14 percent of all commercial loans. In terms of total value mortgage originations appear flat, but without accounting for these massive loans mortgage issuance has declined by some 2 billion dollars so far this year.

The question is are these large commercial mortgages hiding a decline in the New York commercial real estate market?

Sales of commercial real estate are down by 60 percent when compared to the same period last year. Commercial property sales amounted to 5.6 billion in the second quarter of this year. The rise in sales in the second quarter marks a 74 percent improvement over the first, when sales amounted to just 3.2 billion. But the two mortgages mentioned above clearly represent a huge percentage of the total sales this quarter. Commercial mortgage deals are down considerably in terms of volume. Manhattan has seen on average 141 commercial real estate deals close per quarter from 2013 and 2016. Only 71 commercial real estate deals above 10 million dollars have closed so far this year. 66 of these deals closed in the second quarter alone.The decline in total sales volume and the apparently flat rates of mortgage origination suggest a trend, that a few high value mortgages are concealing an apparent slow down in Manhattans commercial real estate market.

Commercial mortgage demand is cooling due to a number of immediate factors, such as interest rate uncertainty and new regulations on Chinese investment.

Interest rate uncertainty is making it harder for many building owners to refinance, or for commercial loans to close. Maturing commercial mortgage backed securities are compounding the need for more tenants to refinance and adding to uncertainty about the mortgage market. But the Chinese government has recently clamped down on the ability of its citizens to acquire foreign real estate. Chinese investors have contributed a staggering 18 billion to Manhattans commercial real estate market. These factors only compound the uncertainty about the future of commercial real estate in New York City.

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Commercial Mortgages: Borrowers getting the help they need from bridge loans

October 11, 2017Uncategorizedcommercial mortgagebigdaddydennis

Bridge loans and similar short term commercial mortgages are growing in popularity. These short term loans are easier to qualify for and in many case are more flexible than traditional loans. CMBS borrowers and retailers are finding bridge loans a vital source of financing in todays economic climate.

Investors with short term financing needs find bridge loans particularly attractive. Bridge loans are held on lender balance sheets usually for periods of 12 to 36 months. These loans are often secured by the real-estate being purchased. Commonly bridge loans are often used to make down payments in order to complete the purchase of property.

These loans are often taken out in lieu of conventional financing and are usually paid off once a property owner finds a more conventional mortgage. Bridge loans can be applied to a slew of different property types and used to finance a multitude of projects. Properties or projects which traditional banks will likely deem too risky to finance.

The lower qualifications involved bridge loans often helps property owners finance necessary improvement projects. Traditional banks are unlikely to approve loans for renovation projects, as these banks prefer locations which already producing a steady income. Once a property owner makes necessary improvements they can pay off the bridge loan and apply for a conventional mortgage. Another advantage of bridge loans is that they require less documentation or collateral up front. Because less documentation is needed the approval process for bridge loans is considerably faster. In some cases, investors may face denial by traditional banks just as a deal is about to close. In these cases an investor can complete the deal by taking out a bridge loan rather than starting the conventional application process all over again.

Qualifications and loan caps on commercial mortgages are making bridge loans a vital source of financing.

In general commercial property values are stabilizing and in some markets they are even declining. This trend makes it hard for properties owners and investors to refinance for a larger amount, as banks continue to remain uncertain about property values in the long run. A growing number of commercial mortgage backed securities are also coming due. With these securities maturing many CMBS borrowers will need to quickly refinance or risk default. Bridge loans are filling the gap for many of these borrowers.

Struggling retailers are also finding bridge loans increasingly attractive commercial mortgage options.

Vacancies are on the rise at many shopping centers which makes it harder for land lords to refinance.The owners of shopping centers may need financing to make necessary improvements to their locations in order to compete with online retailers. Value add projects on these struggling retail centers (projects traditional banks are not likely to finance), are becoming increasingly necessary in order to attract customers. Land lords are turning more and more to bridge loans. Bridge loans enable them to add amenities to their locations bolster sales and to hold onto existing tenants. In short bridge loans are likely to grow in popularity as investors seek to refinance and to make necessary improvements on struggling properties.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

New Chinese Regulations could put the brakes on many commercial mortgage deals.

October 10, 2017Uncategorizedcommercial mortgagebigdaddydennis

Chinese regulators are attempting to put the brakes on overseas real estate acquisitions by its citizens. The new regulations will make it far more difficult for Chinese investors to close commercial mortgage deals.

This July the Chinese government introduced new restrictions on foreign investment that are already impacting US markets. In 2016 Chinese real estate investment totaled a massive 101.4 billion. That number has declined by 46 percent, to 48 billion dollars, during the first half of this year.

The new restrictions make every foreign investment acquisition over 1 million dollars subject to government approval. The question is why has the Chinese government taken such a harsh stance against foreign investment by its citizens?

China wants to ensure investment activity aligns with the communist parties economic and political agenda and also to protect its citizens from “irrational investments.” Regulators are concerned that recent real estate investments in the US by many firms may be backed by large debts. There is also concern on the part of regulators that many US commercial properties are overpriced. However the greatest reason for the new capital outflow restrictions seems to be the frenetic pace of foreign investment by Chinese citizens. Over the last three years 1 trillion dollars has left China. Such a large amount of money leaving the country at such a fast pace could put the Chinese economy at risk. It seems likely that Chinese regulators want to these vast sums to be redirected into the domestic economy rather than invested in foreign real estate.

More and more deals are likely to remain unapproved by regulators. The delay will make it harder for Chinese investors to close commercial mortgage deals.

According to Ten-X Commercial Real Estate Associate Director Conlyn Chan, “Chinese companies looking to invest in foreign real estate are required to submit requests for approval to the government, but the government is not required to respond to these requests, and in some cases they’re leaving them on the table unanswered.” Due to these regulatory hangups, US lenders may become wary of working with Chinese investors. Waiting for approval by regulators will no doubt make it harder for Chinese investors to meet deposit deadlines in real-estate transactions, or to secure down payments needed for commercial loans.

However the new regulations wont impact the demand for commercial mortgages tied to US properties by Chinese investors.

A recent analysis by Colliers expects Asian and Chinese investment in US commercial real estate to moderate. Investment by Chinese citizens in US real-estate will not decline dramatically in spite of the new regulations. These new rules are not likely to have any impact on particularly wealthy Chinese citizens. “The high net worth individuals in China have always found a way. They have their ability to move funds, whether it’s from inside the country or outside the country, despite what the government puts in front of them,” said Edward Mermelstein , partner at One & Only Holdings. The pace of Chinese investment will likely slow, even as wealthy citizens skirt the new regulations. Considering the pace of Chinese investment between 2010 and 2016 the slow down may feel more acute than it actually is. The US commercial real estate market remains fundamentally strong. Mermelstein claims that few of Chinese clients see any reasonable alternative to US commercial real estate as an investment.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Commercial Mortgages: How to evaluate the different types of commercial mortgage

October 10, 2017Uncategorizedcommercial loan, commercial mortgagebigdaddydennis

C-loans claims there are 12 distinct commercial mortgages. The following article groups these 12 types under three categories, permanent, equity and short term commercial loans.

Essentially conventional commercial mortgages differ from residential mortgages, in that commercial mortgages finance the purchase of commercial property. Standard commercial mortgages are sometimes referred to as “permanent loans,” and characteristically have terms longer than five years with some degree of amortization.

Commercial property owners can also take out second mortgages. However second mortgages are uncommon when it comes to commercial property. The terms of many permanent loans expressly forbid borrowers taking out a second mortgage. A more common practice is for corporations to borrow against shares ownership, known as a mezzanine loan. In case default mezzanine loans usually grant lenders the option to buy back shares ownership in a corporation and seize control of the companies property.

Some types of commercial financing are not even loans at all.These arrangements are termed equity partnerships. In a preferred equity partnership a “preferred” investor lends a corporation money for a fixed share of the company’s profits in the future. In addition there are joint venture and venture equity partnerships. Joint venture partners often finance the full price of a construction project in exchange for a fixed share of the properties future income. Joint partnerships are far more difficult to secure in comparison with venture equity partnerships. Venture equity partnerships often involve smaller originators, such as debt funds or real estate investment trusts.

Commercial mortgages differ from residential mortgages mainly in the variety of short term loan options avalable.

Bridge loan are short term loans which give a borrower time to lease or renovate a property. The terms of bridge loans generally run 1 to 2 years. Bridge loans are usually interest only and offer a considerably faster approval process than a traditional commercial mortgage. Construction loans are another type of short term commercial lending. As the name implies, construction loans are used for the purpose of building new commercial developments. Construction loans often have terms of 12 to 18 months, and are only released as a construction proceeds. Notably borrowers only pay interest on the amount of the loan released throughout the course of the construction project rather than paying interest on the total loan amount.

Construction lenders often require borrowers to take out unique and sometimes very costly commercial mortgages before any loan is approved, known as take out commitment loans.

Take out commitment loans are conventional loans taken out before the balloon payment on a construction loan comes due. Take out commitment loans are sometimes issued in the form of promissory notes. This averts the risk for a construction lender that a borrower will default when a construction loan comes due. These notes are referred to as forward and stand by take out commitment loans. These loans take on the form of a letter issued by a mortgage provider that promises to deliver a takeout loan within a period of 18 months after a construction project has been completed. Often these letters stipulate certain construction specifications or occupancy rates. They are usually expensive and often go for one to two points of the total loan amount. There are also stand-by take out commitments loans. Stand by take out commitment loans have far more onerous terms than forward take out commitment loans.

Commercial loans come in many shapes and sizes. It is important to have a clear understanding of what each type of loan entails and how each loan should applied. A conventional mortgage can help purchase property, a mezzanine loan or a bridge loan can help fund expansion and a construction loan is obviously used to get new projects off the ground. Take out commitment loans are usually meant to appease construction lenders, who take on the risk that a borrower may default when a construction loan comes due.

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Tag Archives: commercial mortgage

Securing A Commercial Mortgage in Texas – Preparing For Your Mortgage – Step 1 – Pre-qualification

What happens after I submit my pre-qualification application and documentation for my commercial mortgage?

Be Prepared and Know All of Those Expectations When Looking at Commercial Mortgages

Just like with every big financial decision, when applying for commercial mortgages, it can be very scary, intimidating and stressful. But the more research you do and the more you know, the more likely that your applications efforts will be successful.

Know that lenders are there when you need them for commercial mortgages, but they can’t control the actions of third parties that they may work with

The commercial mortgages application process doesn’t have too many differences compared to other loan applications

The Benefits and Things to Consider When It Comes to Commercial Mortgages

There might not be too many reasons for commercial mortgages, but there are many advantages to using them. Mortgages can be used for buying land, developing new properties or even extending renovations on current premises.

But still beware of some disadvantages when it comes to commercial mortgages

For your commercial mortgages to be successful, you need to pay attention and continuously converse

How to Prepare for Commercial Mortgages

There are many steps that you need to take before you begin your search for commercial mortgages. Following a well thought out plan can make your process less stressful and much more successful.

Invest Your Time in the Process

More than Just an Application

The Cons of Having Commercial Mortgages and How to Avoid Them

Sometimes just renting is the way to go as opposed to owning and having commercial mortgages.

A final “downside” to owning a property versus renting is the commitment that you might not be able to get out of.

Learn to Think Like Commercial Lenders

Securing a commercial mortgage is never an easy process. But you can greatly increase your odds of an approval by learning what commercial lenders are looking for on loan applications.

Numbers Are Not Everything

Demonstrate Your Professionalism

Commercial Mortgages: are high priced deals masking a decline in New York City commercial real estate?

Are unusually large commercial mortgages masking a decline in mortgage origination in New York City? Two large deals represent the bulk of sales in the second quarter. Without these deals the numbers would indicate a decline in the commercial real estate sales in New York City.

The question is are these large commercial mortgages hiding a decline in the New York commercial real estate market?

Commercial mortgage demand is cooling due to a number of immediate factors, such as interest rate uncertainty and new regulations on Chinese investment.

Commercial Mortgages: Borrowers getting the help they need from bridge loans

Qualifications and loan caps on commercial mortgages are making bridge loans a vital source of financing.

Struggling retailers are also finding bridge loans increasingly attractive commercial mortgage options.

New Chinese Regulations could put the brakes on many commercial mortgage deals.

Chinese regulators are attempting to put the brakes on overseas real estate acquisitions by its citizens. The new regulations will make it far more difficult for Chinese investors to close commercial mortgage deals.

More and more deals are likely to remain unapproved by regulators. The delay will make it harder for Chinese investors to close commercial mortgage deals.

However the new regulations wont impact the demand for commercial mortgages tied to US properties by Chinese investors.

Commercial Mortgages: How to evaluate the different types of commercial mortgage

C-loans claims there are 12 distinct commercial mortgages. The following article groups these 12 types under three categories, permanent, equity and short term commercial loans.

Commercial mortgages differ from residential mortgages mainly in the variety of short term loan options avalable.

Construction lenders often require borrowers to take out unique and sometimes very costly commercial mortgages before any loan is approved, known as take out commitment loans.