Commercial Loans - A Solution For Business

Commercial loans have transformed the financial market tremendously. Commercial loans form a big part of the loan markets. The buying, selling and purchasing of commercial properties have increased a lot, therefore commercial loans is in more demand.

To get a commercial loan sanctioned it is not that difficult but the creditors will always check your financial status first before they offer you a commercial loan.

An important thing that is always taken into account before a creditor gives out a commercial loan is the debtor's credit history and their demands. Different kind of policies and processes are followed before a commercial loan request is approved.

Initially, the loans were also sanctioned at the creditor's guidelines and their credit policies. One of the important factors to be kept in mind is the flow of cash.

These days, Commercial properties are more in demand than residential properties because it is used for business purposes. The lender normally will ask the debtor to pay 20% initially and then a bank or mortgage institution as commercial loan gives the 80%.

Before a commercial loan amount can be disbursed loan to value percentage is calculated which further is divided by the purchasing price of the property. The guarantors also need a good credit history and their income proofs are very necessary.

Different types of commercial loans are available in the market, which are listed as below:

Owner Occupied Commercial Loans

This type of a loan is available for business owners who want to buy an office or a warehouse or for that matter any business organizations.

Commercial Bridge loan

Commercial Bridge loan comes into existence when the borrower is planning to sell a property or refinance the property after a certain period. So., this loan helps the borrower to gain an interim financing.

Commercial Real Estate Loans

It is designed to take care of the financial need of small-commercial building like industrial buildings or retails shops etc.

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Apartment Building Loans - What You Need to Know For Today's Market

It's a tough time for the real estate market today. Mortgage banks are making their requirements more stringent in both residential and commercial markets, which make it harder for investors to invest in new properties. This means that those looking to buy apartment buildings need to be smart with their decisions and make sure that he is working with a reputable company that has experience with this type of investment when the economy is low. The following is some current information about how the mortgage banks are working.

The rules will not be bent anymore.

In the past, it was not uncommon for a borrower to be a little under the minimum requirements for a loan and still qualify. This is no more. Underwriters at these banks are becoming stricter when it comes to the requirements for getting these loans. In order to qualify, your net worth must meet the minimum requirements or you're out of luck.

There's aren't many loan programs for commercial real estate acquisition or refinance left. In the past few years, it has become increasingly difficult to find a mortgage broker who specializes in apartment building sales. It's much simpler to find one that specializes in residential real estate opposed to commercial real estate. Not too long ago, it wasn't very difficult to find and qualify for an 85% loan-to-value mortgage for an apartment building, but the same is not true today. Those people looking to invest in this type of real estate really has their work cut out for there because although there are plenty of brokers out there, it has become increasingly harder to find one that specializes in this type of real estate. I, personally, have never found a broker that handles residential real estate that also has a good track record with commercial real estate.

When you finally do find a mortgage broker that specializes in apartment or commercial real estate, there are several factors that need to be taken into consideration.

First, it is crucial for the investor to understand the fees that will be involved. In most cases, commercial mortgage brokers will charge only one point in fees on an investment. In my past experiences, I've seen new apartment building investors try to contact the banks themselves in attempt to avoid this fee. This doesn't work. Independent investors have to realize that any bank that handles apartment building investments is a broker and will sell their loans to the secondary market.

What most first-time apartment building investors may not realize is that by avoiding a broker to save money, it can cost more money in the long run.

Surprisingly, you will often find the best interest rates when going through a commercial mortgage broker. In addition, when you attempt to get the loan yourself, you're cutting your options short. When going through a bank independently, you will normally be offered only one or two programs for this type of investment, but when you use a mortgage broker that specializes in this market, your options more than double. This allows you to choose the program that is right for your unique investment.

Ted Karsch is the creator of the ultimate apartment buyer's resource: The Buy Your First Apartment Building E-Course His E-Course gives the beginning apartment building investor all of the tools and knowledge necessary to buy and manage profitable apartment building investments anywhere in the US. His website http://www.ApartmentBuildingInvestor.com provides tools, software and information for apartment building investors.