First thing to discuss here would be that the commercial and residential markets differ tremendously. Aside from the borrower's credentials, the main factor the bank will focus on is the property's performance. By performance of the property, I mean the ability of the property's income to service its debts. Furthermore and especially recently, banks have been able to cherry pick only the best deals because federal regulations have caused banks to tighten their lending criteria.
So what does that mean for the average borrower? The commercial mortgage borrower is not able to find a bank loan as they might be used to. And if he or she does, there's usually limitations:
- Commercial mortgage banks and S&L institutions often will not go beyond a 60% LTV (meaning they will only offer 60% of the property's equity)
- Commercial mortgage banks will usually not go beyond a 20 year amortization (period for the loan to be repaid)
- Commercial mortgage banks often wont look at any credit scores below 660
Higher loan to values % up to 90% of equity
Amortization schedules up to 30 years
Credit scores from 580 and above
Commercial mortgage brokers have partnerships with private lending corporations, life insurance companies, pension funds, private investors and other sources of capital. These brokers have the knowledge of where to fund a specific deal that the bank can't. Also, commercial investors are constantly needing capital because commercial mortgage loans balloon (expire) faster than the length of their term, this means commercial properties are constantly needing to be refinanced.
When you need to work with a commercial mortgage broker who can help get your loan approved and closed fast, try www.allaccessloans.com.
No comments:
Post a Comment