Commercial Loan

Becoming a Commercial Mortgage Broker

One of the most lucrative career paths in the modern society is being a commercial mortgage broker. In the present world, owning a home is an essential part for every person. Therefore, ideally helping people to access resources to achieve their dream is the best job out there. But how do you become a commercial mortgage broker? In really sense it requires a high level of educating and extensive training. Commercial lending institutions play a major role in providing the required training but such training is limited as it is aimed at selling commercial loans and other products hence not sufficient. Hence there are established organizations that are dedicated towards training and educating the commercial mortgage brokers.

Basically, a commercial mortgage broker is an individual who offers financial solutions to owners or buyers of commercial property. The mortgage broker links commercial lending with the personal and business individuals who are seeking mortgages and other lending products in order to transact in a commercial property. To become a commercial mortgage broker you will need requires;

Training

Every job requires training and knowledge to be able to undertake it efficiently. Every commercial property needs to be financed hence the broker is needed to seek competitive rates for the business mortgage loan or other commercial mortgage provided by lending organizations. Further brokers help in determining the price and location of property. To do these, brokers undergo training and acquire the necessary knowledge to help them perform such duties. Essentially a high level of educating and extensive training is required. Commercial lending institutions play a major role in providing the required training but such training is limited as it is aimed at selling commercial loans and other products hence not sufficient. Hence there are established organizations that are dedicated towards training and educating the commercial mortgage brokers. Universities, colleges and various recognized bodies provide the required training and education to become a commercial mortgage broker. See more this site:http://www.jodiesaunders.com/commercial-real-estate-loans-how-to-get-a-commercial-mortgage/

Get a license

It is necessary to have a license in order to become a commercial mortgage broker. There are appropriate regulatory bodies that have been set up to regulate all brokers. To get a license you will first need proper training and certification that shows that you have the skills and education needed to practice as a broker. The regulatory body has a responsibility of ensuring that brokers comply with the set laws and regulatory. Treating your customers properly and abiding by the set ethics are essential in acquiring a license and continuing to use it. The license provides the authority and confidence to practice as broker.

Marketing skills

Commercial mortgage brokers provide brokerage services to companies and individuals in understanding and undergoing the whole process of applying for a commercial loan.  Thus, a broker requires excellent marketing skills that can help in getting the clients to provide services. Getting work requires that brokers engage in constant marker research to understand and be aware of the prevailing mortgage rates and available properties in order to be able to convince clients and offer services efficiently.

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Commercial Loan

Commercial Real Estate Loans: How to Get a Commercial Mortgage

A commercial mortgage loan is used to buy property for your business out of as well as buy income resulting commercial properties. How the property will be used affects what kind of commercial mortgage is right for your business. The loan came in the short term say a few months and as long as 30 years.

The loan fees and interest rates vary with time as well as property at hand.

Types of commercial mortgage loans 2016

The common long-term commercial mortgage loans are a traditional commercial mortgage, SBA 7 (a) loan for commercial real estate and CDC/SBS 505 commercial mortgage loan.

The traditional commercial real estate loan has a term of 5-25 years to with interest varying 4.5% to 7.5% with an option of the balloon payment. The SBA 7(a) commercial mortgage loan has a 20 to a 25-year term and fully amortised with variable interest rates of 5%-6.5% and no balloon payments.

The CBA/SBA 504 loan has a 10 to 20 years term, variable to the fixed interest of 4% to 5.5% and can be made in two parts.  1st mortgage from the bank at a fixed or a variable rate and have a balloon payment and 2nd mortgage from CDC fully amortised and had a fixed rate.

The type of financing available fall under the two broad categories:

  • Owners occupied where the buyer’s business fall under 51% or more of the property space.
  • Investment –income was producing where the buyer intends to lease the space to other business.

How to qualify for a commercial mortgage?

To qualify for a commercial mortgage, you must meet the following:

  • A credit score of 680+
  • No recent bankruptcies, tax liens or foreclosure
  • Minimum cash down payment of 10 percent
  • Business is 3+ old
  • Business has DSCR of 1.15+

 

Although, there special cases that warranty exceptions for borrowers with high net worth or have investment properties with high operating net income where the lenders set above minimum borrows requirements. More details in this post: http://www.jodiesaunders.com/stated-income-commercial-loan-for-your-commercial-property/

How to apply for a commercial real estate loan?

Once you have fully determined you meet the minimum basic borrower’s requirements for a commerce mortgage loan and the best for you, it’s time to find financing. The commercial mortgage loan application is more involving than applying for business credit card and at the time as hard as you may think.

When applying for a commercial mortgage loan, you will need credit and net worth requirements, a business plan as well as financial projecting and a management resumes. You will also need a loan to value ratio, debt services coverage ratio, and net operating income.

Lastly, review the common costs of commercial real estate loans beyond interest rates being charged. Although, the fees are standard costs that come prior closing, meaning you will need to cover them using your funds and not the loan money. The four most common costs are application and packaging fees, appraisal and survey fees, environment studies as well as prepayment penalties.

Get government-backed commercial mortgage loans as they are the most generous in rate and terms, but a business operating out of 51% or more of the properties are required.

Commercial Loan

Stated Income Commercial Loan for Your Commercial Property

Obtaining a commercial loan for a commercial property has become far easier as the years have come and gone. However, stated income commercial loans have really taken off too and it’s not hard to see why; these are slightly different than an average loan and can prove very effective.

There are many businesses and business owners who want to buy commercial property, but, in order to do so, have to look at a stated income commercial loan. Read on and find out more about these loans.

What Is A Stated Income Commercial Loan?

Despite the fact SICL are very popular commercial lending options, most aren’t entirely sure what they are all about. So, what is this type of loan?

Well, a SICL is a slightly different loan. Borrowers do not need to in fact prove they will be able to repay the loan by means of their personal income streams, but rather by the rental potential from the property. This might sound quite strange but that is why these loans are very popular. A lot of lending streams now offer these loans as commercial property can offer some amazing value for owners. Usually, if the commercial rental figures are good, the loan companies are satisfied they’ll receive their money.

Why Choose SICL?

These types of loan are very impressive indeed simply because they do not require a lot of documentation. Now, as most will know, obtaining a loan covers a lot of paperwork and that can be extremely frustrating. However, with the stated income commercial loans you can actually find there are very little documents required. Since you’re getting a loan to the property’s cash flow there is no real need to have a lot of documents.

This is why a stated income commercial loan has proven to be vastly popular. Also, approval rates are far more impressive than say with a standard loan so that is another important factor to remember. Being able to get approval for a loan is often hard but with these loans, it’s a little easier.get more details from http://www.businesswire.com/news/home/20161208005132/en/Apollo-Commercial-Real-Estate-Finance-Closes-Mortgage

Why Are Stated Income Commercial Loans So Important?

Obtaining commercial property is hard. There is not only a big down payment to be made, but substantial costs attached and it can be very costly indeed. There are not many lenders who are going to allow a newcomer to borrow such a high amount in today’s market. Commercial lending is good in one wa, but traditional methods are very tough on newcomers which is why stated income loans are popular. A holding company can in fact have their name on the loan and not the borrower which is unique.

Strict Rules to Become Eligible

Commercial LoanHowever, when it comes to eligibility there are some strict rules that follow. For instance, a commercial loan can only be given if the business has been running for two years or more or plans to occupy the business for that amount of time. The credit score also needs to be at least six hundred or above that. Any guarantor or a person who is operating the company cannot in no way have a bankruptcy against their name. If a person has been declared or filed bankrupt within the last three years, they will not be eligible for a stated income commercial loan.

Commercial Lending Is Easier To Obtain

Today, more businesses look to commercial loans and new lending streams to help them build and advance their business. These are useful as it’s hard to buy commercial property. However, it is important to state that the loans must be repaid and there may also be higher interest attached. This is very important to note, but if you’re willing to repay all monies then looking at a stated income commercial loan can be great.

Commercial Loan

Commercial Loan Refinance – Timing Is Crucial

When you have a business mortgage loan, but are in need of refinancing, you absolutely have to strike at the best time. This isn’t always easy to do and for most, they end up refinancing at the wrong time and end up with a very costly bill. When you’re in the commercial field and want to refinance your loan, then it’s important to time it right. Read on and find out more about how you can time your refinance perfectly.

How Long Have You Had The Loan For?

Let’s say you have a ten-year lease on a small retail store that cost around ninety thousand dollars and you were only in year one, you wouldn’t find this to be the very best time. The reason why is simply because you are only twelve or so months into a ten year lease and while you might have made all payments so far, it doesn’t look good on you as a borrower. Basically, refinancing a commercial loan needs to be done perfectly and this isn’t right.

However, if you were in year eight or nine or even seven of the ten-year lease, it would be more favorable. That is why you must think about how long the loan has been active for before refinancing.checkout website here!

Wait Until the Commercial Property Market Is Stable

When the property market is at its lowest then everyone is trying to refinance and this often means the time isn’t right for you to do so. The reason why is simply because lenders know there is a possibility they may never see their money again so are going to add a lot of charges onto refinancing loans. When you have a business commercial loan you have to wait until the market is prime before you refinance. This way you might be able to avoid large charges and get a fair refinancing deal as well.

Timing Is Crucial and it’s Unpredictable

Commercial Loan RefinanceWhile people say ‘timing is crucial’, it’s often hard to know when the right time to strike is. Sometimes, when you think the market is stable, you still get a rubbish deal on your refinancing. The trouble is whether you’re looking to refinance now or another a later point, you can’t predict how good your deal will be. A commercial loan and refinancing can often be easy to obtain but getting the best deal is tough. You have to talk to a financial planner so that you and they can decide when the best time is to refinance.

Be Wary and Refinance When Absolute Necessary

A lot of people think refinancing is easy and, in all honesty, it’s not. There are times when the market is terrible and it means you don’t get the best deal; however, it’s also important to note that refinancing is serious. This should be done when you have no other options and hopefully you and your financial planner will have discussed all options available. A refinancing a business commercial loan can be incredibly simple if you put your mind to it and strike when the time is right.