Commercial Mortgage – Flexible Finance Solution For Business Intended Properties
Posted by: admin in Finance, tags: Balloon Payment, Bank Of England, Business Purposes, Credit Score, Fixed Rate Mortgage, Interest Rate Options, Rate Of Interest, Value Ratio, Variable Rates, Warehouses
Commercial mortgage is the loan purchased by a borrower to finance a property for business purposes. The lender has a legal claim over the financed property until and unless the borrower repays the loan in full. With the help of commercial mortgage, one can purchase:
• Shops and offices
• Factories and warehouses
• A piece of land
• A brand new building
Commercial loan can also be used to buy an already existing business. For example, a running hotel or a retail store can be purchased using commercial mortgage. Here are some other aspects of commercial mortgage that are useful to know.
Eligibility Criterion’s
A Commercial Finance expects the borrower to fulfill certain eligibility criterion’s for the loan. For example, a good credit score is one of the most important requirements for the approval of commercial mortgage. Loan-to-value ratio is another thing considered by the lender. It is the expectation of the lender from the borrower to make some contribution in the purchase. Stability and profitability of the borrower’s business is another factor that can affect the lender’s decision to approve commercial finance.
Interest Rate Options
The commercial loans are available with two interest rate options. First is the commercial Fixed Rate Mortgage in which the rate of interest remains unchanged for a fixed term of the mortgage period. The standard variable rates are paid by the borrower once the fixed rate term ends. The second option is the commercial variable rate mortgage, in which the rate of interest changes according to the base rate decided by the Bank of England.
Commercial Mortgage Repayment
One way of repaying the Commercial Mortgage is through a set number of equal payments. Each payment consists of one part as the interest and remainder as the principal. A variation to this is the equal payments with final balloon payment. In this, a set number of small monthly payments are made with a final balloon payment at the end. Interest only payments require the borrower to pay only the interest through monthly payments while the principle is paid as a balloon payment at the end.
Benefits of Commercial Mortgage
The borrower retains the complete ownership of the property. The interest payments on commercial finance are tax-deductibles. Moreover, the borrower has the feeling of owning a commercial property while the monthly payments remain less than or equal to the amount he would otherwise pay as rent.
This is a boon to the small and big business owners of Mortgage. Make sure to deal with a reputed commercial lender.
By: Suzanne Wiiliams
The Behind the Scenes of Mortgage Advertising
Posted by: admin in Real Estate, tags: Advertisements, Credit Score, Gfe, Good Faith Estimate, Mortgage Advertising, Mortgage Customer, National Ad Campaigns, Phrase, Radio Tv, State Of California
Have you ever been enticed by a radio, TV, or newspaper mortgage advertisement? I am not surprised as they are filled with lies put there simply to get your attention. And they keep doing it because it’s legal and it makes them a ton of money.
Mortgage advertisements are not to be trusted.
A Good Faith Estimate (GFE) is legally required to show you costs, rate, payment, and cash needed to close. And in the hands of an ethical mortgage broker, you can bank on the numbers.
But all too often, that is the exception, not the rule.
Radio spots, newspaper advertisements, and TV commercials, are all designed to get the phone to ring, not give you real information.
The No Cost Mortgage Lie
The phrase “no cost” in mortgage ads is a case in point. There is no such thing as a “no cost” loan, and the state of California outlawed the phrase in mortgage advertising in their state, but that does help those of you outside California.
Many large banks and small mortgage lenders alike have used this lie in their national ad campaigns. They may call their program a No Fee or No Closing Cost loan, but regardless of the name…it is one of the most deceptive of mortgage advertisements.
To understand this lie, you must understand in order for the bank or lender to make your loan a “no cost or no fee loan, they must jack up the rate. I don’t see how anyone could consider a rate 1% or more above a normal rate is not “costing” the customer.
It is.
The Low Ball Rate Quote Lie
Mortgage advertisers always low-ball rates in their ads. I once worked for a company and the branch manager consistently low-balled the rate for the Sunday Newspaper display ad, saying when I questioned him on it, “Hey, I’m not paying $1200 for the ad and not getting the phone ring.”
So don’t believe rates quoted in kind of mortgage advertisement.
Think about it…every mortgage customer has a different credit score, loan-to value, and income picture, so how could one rate apply to all?
Simply put, it can’t.
The Missing Rate Lie
Also if the rate is mysteriously missing, that itself should raise a red flag!
When the ad on focuses on “closing costs” (or the lack of them) or the “flat fee”, or the low payments and therefore the amount of “savings” you’ll get….look out!
The Quicken Advantage loan ad campaign comes to mind. The ad said you could save $6000 a year with their loan. Sounds good right?
Wrong!
If you read the fine print, you would realize this mortgage had an adjustable rate and you only paid the interest with each payment.
This means if rates go up, you’ll lose any savings by having to refinance again. And to add insult to injury, you may not be able to refinance to get away from the rising rate since your balance has not moved, but your home value may have dropped.
But maybe that was the plan all along.
So be skeptical every time you see a mortgage advertisement.
By: Rob K. Blake
Stated Income Mortgage Loan – Get Approved Online
Posted by: admin in Real Estate, tags: Buying A Home, Credit Score, Credit Worthiness, Mortgage Online, Necessary Paperwork, Online Lenders, Online Mortgage, Social Security, Stated Income Loans, Stated Income Mortgage Loan
A stated income or no doc mortgage loan allows individuals with difficult to document income to buy a home. With a documented credit score and reasonably stated income, you can qualify for a mortgage at a slightly higher rate. Online mortgage lenders allow you to easily compare rates on stated income mortgage loans, guaranteeing that you get the best rate.
Getting Started
To apply for a stated income or no documentation mortgage loan you will need to provide necessary paperwork verifying your credit score and employment. You must provide your social security number since your credit worthiness is based almost entirely on your credit score. Typical stated income loans will require a credit score of at least 680, but some lenders will offer loans for scores as low as 580.
You will also need to prove you are employed – self-employed individuals qualify. You will need to disclose your income, which must be reasonable in your profession.
Finding Mortgage Lenders
Just like with any type of mortgage loan, it pays to compare lenders’ rates and fees. Even a quarter of a percent difference can save you thousands over the life of your mortgage. However, you also need to factor in fees when comparing lenders. Fees often hide the true cost of a mortgage loan.
To quickly find lenders, use a mortgage lender website to request basic quotes. By providing the loan amount and your estimated income, lenders will give you a generic mortgage quote. Online mortgage lenders allow quick shopping from the convenience of your home.
Getting An Approved Loan
Once you have found a mortgage lender, you have two options. You can apply to be pre-approved for your stated income mortgage loan or you can find your house and then apply for a loan. Pre-approved borrowers increase the chance that their offer will be accepted when buying a home.
When you are ready to apply for your mortgage loan, you can complete your application online by entering your personal information over a secure server. Final paperwork will be mailed out to you to review and sign. Once notarized, you send the forms back to the lender for their final approval.
To view our list of recommended mortgage lenders who have stated income loan programs online. Visit this page:
Recommended Mortgage
Lenders Online.
By: Carrie Reeder
Home Mortgage Lenders – How to Find A Good Mortgage Broker Online
Posted by: admin in Real Estate, tags: Comparison Shopping, Credit Score, Current Interest Rates, Employment History, Lower Mortgage, Mortgage Broker Services, Mortgage Lender, Neighborhood Bank, Online Lenders, Top Choices
Mortgage lenders have set up shop online, but they aren’t all reputable mortgage brokers. To find a good mortgage lender you need to compare rates and research to find reputable companies.
Mortgage Broker Services
A mortgage broker works with several lenders to find the best financing for the purchase of a home. No matter if you have perfect credit or bad credit, typically a mortgage broker can find you a lower mortgage rate than if you went with your neighborhood bank.
It is important to remember that brokers are paid by adding on a fee or point to the loan, so you should do comparison shopping even with a mortgage broker.
One Stop Shopping
Online mortgage brokers have reduced time spent comparing mortgage lenders by consolidating information about several lenders into one site. Through such mortgage sites, you only enter your information once to receive interest rates from several different mortgage lenders.
Compare Rates And Fees
While online mortgage brokers make getting quotes easy, it is important to still take the time to compare rates. Your mortgage rate will be based on current interest rates, the property’s location, your credit score, and employment history. If you receive a rate quote without providing this detailed information, then you are just getting a general estimate.
General estimates for mortgage rates are still a useful tool to narrow your choices to at least three lenders. You can then apply for a true mortgage estimate with the most promising companies. With these true mortgage quotes, look at both the rates and fees to determine the actual cost of the loan.
Research Reputable Companies
Interest rates aren’t the only factor to consider when comparing mortgage lenders. You should also be comfortable with the lender’s reputation. Unfortunately, there is not a list of reputable mortgage lenders, but common sense can protect you from a bad mortgage lender.
First, do research on your top choices for mortgage lenders. Check out the lender’s website to find their physical location, list of terms, and available customer support. Secondly, beware of too good to be true claims, such as statements that this is the only company that will finance your mortgage loan. And finally, do not sign any blank forms from a lender. You don’t know what they add later.
To view our list of recommended mortgage lenders online, visit this page:
Recommended Mortgage
Lenders Online.
By: Carrie Reeder
Mortgage Qualification Factors
Posted by: admin in Real Estate, tags: Background Check, Confidence, Credit Score, Employment Status, Important Information, Instances, Lenders, Loans, Several Factors, Vital Factor
If you plan to purchase a home, then you must know that you need to qualify for a mortgage. Although there are those, who buy houses in cash, this seldom happens. The question is how will you qualify for a mortgage? What are the factors affecting it?
As mentioned earlier, the lender will consider several factors before he approves or disapproves your application. He will also decide what term to offer you. The factors identified below are few of the basic factors that will influence your qualification.
1. The most important factor when qualifying for a loan is your credit score. You will need to authorize the lender to get the information they can use to evaluate your score. In order to qualify, it is essential that you check your credit reports regularly as well. There are several instances of erroneous records. You can request for a copy of your credit reports from the different credit bureaus to check this. If there are errors on the record, file a dispute right away to correct the report.
2. Your existing debt is also a factor. If you have multiple current loans, pay up some of them first. If you are unable to do this, see to it that the outstanding credits have minimal balances. If you have a lot of outstanding credits, the lender will not have the confidence to offer you a mortgage.
3. Your current employment status will also be a factor. Bear in mind that the lender will conduct a background check of your employment background. Your position and length of service are important information. In addition to that, your lender will also ask for your monthly income. They want to check if you will be able to afford the monthly mortgage in the future.
4. The down payment you can make is another aspect. You will most likely be approved if you made a generous payment. This is where your savings will come into play. You will also need your savings to the closing costs you will incur.
5. The lender is also a vital factor for you to qualify. Lenders are very different. Some may not find your credit score acceptable but others will accept your application as long as you make higher down payments. The interest rate of the term should be higher than the usual. Find a good lender. You can use the information online. Your friends and family might also make a good recommendation.
Remember, qualifying for a mortgage is easy as long as you know the factors affecting it beforehand. Among the most important factors is your credit score so make sure that you take care of it. Monitor its details by asking for a credit report from the different credit bureaus. If there are errors, file for disputes right away. Other factors can also influence your qualification for mortgage. Among them are your existing debts, your monthly income and your employments status. The down payment you are going to make as well as the type of lender you have also affects your mortgage application.
By: Roby V. Pagong
How Does a Mortgage Work?
Posted by: admin in Real Estate, tags: Credit Report, Credit Score, Home Mortgage Loan, Interest Rate, Mortgage Lender, Mortgages, Poor Credit, Shopping, Subprime Lenders, Subprime Loan
Almost anyone can get a mortgage so unless you have unbelievably bad credit you will have no problem getting a mortgage for your new home. If you have a few blemishes on your credit report you will still be able to get a home mortgage loan. You can find mortgages online and offline that can hook you up with a great mortgage no matter what your credit looks like.
If you have poor credit what you will have to find is a good subprime lender. If your credit score is under 620 you will have to get a subprime mortgage. You will find yourself in this category if you usually pay your bills late, the later you pay them the worse your credit score is going to be as a result. When you are talking to lenders about getting a mortgage they will not actually use the word subprime but that is what the mortgage will be. They have stopped using these sorts of words because they tend to scare customers away.
Getting a home mortgage loan is simple if you have excellent credit and even if you shop around you will not find that the rate vary that much. But if you do have bad credit then shopping around is a must. Rates can be very different from lender to lender. The reason for this is because all of these subprime lenders will decide what kind of risk you pose in a different manner. So if you have a low credit score then you absolutely have to shop around for the best possible rate.
The interest rate on a subprime loan is higher than that on a prime mortgage loan. Before a lender will give you a rate on a mortgage they will have to do risk assessment on you. This means that they will do what is called risk based pricing to come to a final rate for your loan. SO while your interest rate is higher from these lenders just how much higher will depend on several different factors. Such as the amount of down payment that you have, the size of the loan, your credit score and report and even the amount of money you have to pay each month towards your other debts.
You could also have to face some penalties if you decide to pay off the loan early. So down the road and your credit has improved if you then want to refinance the loan you will be hit with hefty fines. These loans may also have balloon payments. With a balloon payment you will have to pay the entire loan amount after only a few years all at one time. If you cannot do this you will then be forced to get a new loan to cover the first. And some loans will even have a combination of the above.
There are many shifty lenders out there that will take advantage of subprime borrowers. They will use the fact that you cannot get a good loan from some other lender against you in order to make more money off of you. Some common ways that these lenders act in a predatory manner are by having unbelievably high interest rates and fees. Some of these lenders will even lie to customers like you and tell them that their credit score is much worse than it really is in order to keep them from trying to get a better loan somewhere else.
Another predatory act is to try to get customers to refinance on a regular basis. They will tell you that you will be saving money but in actuality all you are doing is paying them more money in closing and other costly fees. They then rolled these new fees into the amount that you owe. Some lenders even go so far as to give home loans to people that they know will not be able to pay them off. By doing this they can then foreclose on the home and sell it off for their own profit.
Before you meet with any lenders you need to find your own credit score. This will keep you from being mislead by lenders. Then do some serious mortgage shopping in order to find the lowest possible interest rte. This is the way to save on your home mortgage.
By: Martin Lukac
