Two of the more common reasons for commercial mortgage decline are property value and or concern over net income. As capital sources continue to tighten underwriting standards, borrowers feel the pinch in lower loan to values and higher debt coverage ratios. Transactions that were tight, but doable 3-6 months ago are, in many cases, simply not fundable today.

Building types and or borrower situations that are considered unusual are having a worse time at it, and are often simply ignored. In fact, it is estimated by our contacts at banks, that as high as 80% to even 90% of all commercial real estate loans requests are being declined by traditional banks as of this writing (2/1/08).

Value

First of all, banks tighten the “reigns” by lowering loan to value standards. This reduces their exposure as banks are questioning where exactly values are and are going to be. On a refinance it is was not that difficult to find lenders that would go to 80% loan to value 6 months ago. Now, there are only a few lenders in the nation that continue to offer such high ltv’s and they want to be compensated with high margins and fat prepayment penalties. A good example of this is on flagged hotels. 75% ltv on a cash out refinance were common, assuming of course that the net operating income supported the debt a year ago. Today we struggle to find lenders that will go to 60-65%.

There are different ways to compute value as well. For example many hard money lenders will use a shortened marketing period, like 3-6 months as opposed to the normal 9-12 months period. By doing this it often reduces the appraised value by 20-30% of the properties real worth; because the property is essentially being valued on a liquidation standard.

Income

Another way banks reduce their risk is by increasing Debt Service Coverage Ratio’s. This ratio computes a business’s or income properties ability to meet the potential mortgage payments. A typically ratio is a 1:1.2; meaning that for every $1.20 in net income, the proposed mortgage payment cannot exceed $1 dollar. So the owner will still have $.20 left over after all expenses and the commercial mortgage have been paid.

Banks that are conservative will raise the DSCR to a 1:1.25 or even a 1:1.35 on properties like hotels, assisted living facilities, etc. Sometimes though a bank will become more conservative with this guild line but do it in a less obvious way. For example, they may raise their underwriting vacancy or management percentages from a 3% to a 5% (or as high as 10%)but still say their minimum is an aggressive 1;1.2 - which is basically misleading.

Another component that is often tweaked is the replacement reserves. On office building it’s normally $.20 per square foot for example. By raising that to $.30 psf it further covers their position and makes the loan that much more difficult to qualify for.

Margin

Another issue which is especially relevant today is the widening of margins by banks. There doing this out of uncertainty of the market/risk and or for increased profit. In many cases we have seen banks doable their margins from a year ago. So if you are currently shopping for a commercial mortgage and are confused by the fed lowering the discount rates and yet the rates your quoted are increasing or remain the same it’s due to the bank increasing their margin/spread.

For example, many commercial mortgages are tied to the 5 year swap, an index you may have not heard of before. As of 1/18/08 this index was at an incredibly low 3.3% vs. 5.5% roughly 18 months ago. So if the lenders margin was 4% your actual rate on your loan would be 4%+ 3.3% or 7.3%. Three month ago it was common to see margins as low as 2% -3%, which would have equated into an effective rate in the 6%’s.

One last thought, if you have recently been declined, it is to your advantage to find out why ,so that you can better prepare yourself and your next lender of the issue. Discuss the issue early on, it may not be a problem with the new source or they may have a different way of dealing with it. Do not try to cover it up. Underwriting will discover it and you will waste your time and money.



Sell and Rent Back

There do come times when you find that your financial times are rather hard. You are hard-pressed for cash. Cash is not available anywhere. You may be staring at your zero bank balance and groping in your empty wallet. And then you may have the lenders knocking at your door. They signal the increase of debts on your head. What do you do in such dreary times? Look toward your house? Perhaps you should because your house is what can free you of your troubles. You can sell house fast to put cash in your hands and get over the cash shortage.

At times, there may be circumstances when you have to move out of your house and shift to another. At times, it can be a well-planned emigration move to another country or any another place for health or professional reasons. In circumstances where you have defaulted on your payments on secured loans and are facing the danger of repossession of your house, you can sell house fast to save foreclosure. In dire financial situations, you have to come to face with the fact that you would require to sell your house and and as fast as possible as to bank upon it as the most viable source of cash as much as to save you from legal action. And while you are emigrating, you may not want your house to stay empty and unprotected while you are away. Selling it off is generally the better option.

Whatever be the reason but to sell house fast, you may require the help of professionals such as the property agents who can help you accomplish this at short notice. You can contact these agents online since this is quicker and more convenient, while thus further ensuring prevention of loss of time, which is so crucial in emergency situations.



Passive Income

Financial troubles can come like an eagle to pounce upon you. Scarcity of cash can be a real bear bug, not letting you live in peace. Financial deadlock is one thing you need to get out of as soon as possible. There are different financial schemes such as personal loans. However, when you need cash quickly and in large amount, nothing is as quick and feasible as a quick sale.

This scheme lets you sell your house at quick notice in contrary to the traditional house selling methods that can drag on for months. There is this unpredictability factor because of the long chain of people involved in the process, as your hired property agent would need to contact one person through another. With a quick house sale scheme in place, there are better means. You can sell house fast with the help of quick sale firms.

They can bring about the sale in the time period that you want. You just have to specify the time frame in which you require the sale depending on the urgency of your situation. The rest is taken care of by the quick sale experts. They have the cash available and they have the market knowledge, that is, of the latest property prices and they know the price your property deserves in the short time-frame given to them. They set about their task accordingly with the goal in mind: to help you sell your house fast.

Once you contact them, they will visit you, provide you with a free expert estimation of the net worth of your property and come up with a quick offer. And for all you know, you will find that it is an easy thing to Sell House Fast, fulfilling your wants as soon as you would like it. In the process, you also avoid all the hassles that come along with a traditional house sale.



Sell and Rent Back

A commercial mortgage is a mortgage for a building that will be used for business. Commercial mortgages are like a residential mortgage, but can differ in a few ways. Commercial mortgages are a little riskier than a residential mortgage. They are not for someones home, but rather for business use, usually a start up business which in and of itself produces a risk to the lender.

Commercial mortgages require the same steps as a residential mortgage. However, with a commercial mortgage if the business has an established line of credit separate form the individual business owner, then the businesses credit is used to secure the loan.

Commercial mortgages can have a fixed or variable interest rate. A fixed rate will stay at the same percentage for the life of the loan. A variable rate will change as interest rates change. With a fixed rate the benefit is that a person will always know the cost of their mortgage payment, however, a variable loan allows a person to take advantage when rates drop, immediately.

Fixed rate mortgages though can be refinanced when rates drop and therefore the rate will be fixed at that lower rate. The choice can be difficult and should be discussed with the lender to ensure the best one is chosen for the circumstances of the business.

When applying for a commercial loan a business owner should make sure they have all of their financial information prepared and documentation ready for when they meet with the lender. If it is a start up business then they will need their personal financial records. They will also need a comprehensive business plan including business finances.

If the business is already established and has its own line of credit then the business owner will only need to provide the businesses financial information. It is best to be prepared with income taxes from the last two years for both the business and business owner.

Commercial mortgages are pretty much a lot like residential mortgages. The basics of the mortgage terms are the same. The main difference is the documentation used. When applying for a commercial mortgage a business owner needs to ensure they are well prepared to offer the documentation to prove their business is going to do well or has been doing well.

The lender is mainly interested in seeing that the business is not likely to go under any time soon. If they have any doubts it could cause problems with getting the loan. Additionally, the business owner should be willing to put up some type of collateral to secure the loan, as this will make lenders more likely to consider approving the loan. Anything a business owner can do to ensure the loan will be repaid is worth doing.

Business loans of any type are often considered risky for a lender so they are extra careful in approving them. This is important for a business owner to keep in mind when searching for their commercial mortgage loan.



Repossession

In your uncertain times, when you are passing through a low in your life due to financial hardships, a source of cash is what can help matters out for you. The reasons can range from circumstances as adverse and diverse as illness, divorce proceedings and the like. And if you have a home of your own still standing good, you need not worry. Your home can come to your rescue in any such difficult situation. You can think of quick sale. Also when you have relocation on your mind, you can sell your house fast to gain on time and money. Quick sale helps you out with enough cash in a short time to see your plans through.

Availing to the services of the property dealers renders for you a major help in property evaluation for free, thus you can decide on the proper pricing of your house without much of a problem. If you are not happy with the original price listing for your property, you can also go for a quick renovation. This is just like giving final touches to your beloved home, throwing a few pounds here and there, more so on improving the decor of your kitchen and the bathroom, which can result in a major improvement in the buyer’s perception and pricing of your house.

Whatever your personal circumstances, you can plan to sell your house fast. One major benefit for many people is that it helps them to stop repossession of their house, as and when they are facing such an emergency. A quick sale relieves you of your mortgage payments as well.

You can contact a property agent online, who can help you accomplish a quick sale in order to raise cash quickly. You can avail to their services and make use of their experience and professional expertise. With access to huge resources, which includes a large network and an information database and sources, they can help you sell house fast

, while saving you all the major headaches of paperwork and legal formalities as well.



Quick Property Sale

If you plan to apply for a commercial mortgage, it is necessary to first point out the reasons why do you really need a mortgage. This will help you to get the best out of deal that you settle with.

If you are looking forward to purchasing a commercial property or to expand your existing facilities, to acquire multi unit properties or even to refinance the existing debt, commercial mortgage provides you with necessary funding. You can go to the banks and other institutions that offer several mortgage plans and can select the best type of repayment that suits your business. Depending on your need, the following points are always to be kept in mind for a commercial mortgage deal:

How a commercial mortgage works

What are your responsibilities

The types of commercial mortgages available

How to select the best lender

What the various costs are

The companies with good credit, strong financials and a proven business model generally qualify for commercial mortgages. The commercial real estate includes:

Office buildings

Apartment complexes, condominiums (four units or more)

Strip malls

Retirement homes

Warehouses, manufacturing plants

Health care facilities

Schools, churches

Car washes, repair shops

Restaurants, hospitality

Once you go for commercial mortgage, your monthly payments will help you to build equity instead of just providing office space for your business. The interest tax of your mortgage is also tax-deductible which lowers your business’ gross taxable income. If you come in term with fixed-rate commercial mortgage, where the rate does not change every month, the cash flow management of your business also improves. This enables you to predict your monthly expense without fear of rent increases. And as your commercial property typically appreciates in value, this is considered as a solid long-term investment.

Another advantage of commercial mortgage is that the loan is generally assumable. This helps you to sell your property without any extensive approval process. The buyer can take over the terms of your existing loan without any hassle.

Commercial mortgage lenders don’t provide funding for startup businesses. If you’re looking to launch a company, you may want to look into Small Business Administration (SBA) loans. These loans provide entrepreneurs with fixed rates to start new businesses. But if you are planning to increase the pace of your business and lacking the fund, commercial mortgage is perfect for you. It can not only be a fund for business, commercial mortgage can also help you to meet certain operating expenses like:

Debt consolidation

This situation arises when you have more than one debt and to pay off one you borrow from another source.

Office repairs

This is a very common problem for every business house and a lump sum amount is spent on that.

Monthly bills

There are certain bills that you have to pay every month (electricity, internet, maintenance etc.)

Based on your needs and your business solvency, you have to first gauge how you will handle the monthly repayments with the high interest rates. It is only when you are very sure of the viability that you should go in for a huge responsibility like commercial mortgage.



Quick House Sale

As the economy comes to a screeching halt, many families find themselves in a position where they must relocate or find less expensive housing options.  In order to get the most out of their investment and keep themselves on firm financial ground, they need to be able to sell their homes quickly.  Unfortunately, real estate is not the fastest moving market, and when times get tough it can take months, even years to sell a property.  But don’t worry–if you need to sell your house fast, there is a way!

Rather than turn to Realtors who want to list your property for as much as possible (regardless of how long it takes to sell)  to increase their commission, there are a new breed to real estate professionals who can help you sell your house fast and relieve you of your debt immediately.  These local, independent property buyers will buy you out of your home loan with cash, giving you instant freedom to re-establish yourself in a better situation and save your credit from damage of impending foreclosure.  They may be able to pay you for your equity, and can even lease the property back to you so that you don’t have to rush through the sale and moving to a new location.

Property buyers can also help quickly settle an estate, and buy your investment properties regardless of whether they are leased or not.  For couples facing divorce, selling the house and splitting the profit may be the best way to end things amicably.  And if your property is damaged, you may still be able to salvage a profit from selling it to a property buyer.  You can sell your house fast even in these undesirable circumstances, but you must be willing to go through a property buyer who has the money available and who is ready to buy from you immediately.



Quick House Sale

The real estate market across the country is changing rapidly. In order to quickly sell your home, you need to first understand a few basics, and then work on making the best choice to get what you need out of the house. 

The reasons for selling a house are endless.  Some people really NEED to sell their house, and others just WANT to sell their house. You must decide which group you fit in to. If you need to sell your house, chances are it will fit in to one of the following:

Relocation: You have already moved and the house is vacant.

Probate: The property is being inherited by one or more family members and is going through probate.

Foreclosure: The home is in foreclosure and you risk losing it.

Loss of Job: You can no longer afford to make payments and know you will soon go into foreclosure.

  

Of course there are many other reasons a person may need to sell, but these cover the basics. A person that just wants to sell will have different pricing and marketing tactics than someone that needs to sell quickly.

I need to sell my Grand Rapids house fast, now what?

You have several options. I will go in to more detail on each of the following: First, you can sell the property your self. Second, you could hire an Real Estate Agent to sell it for you. Third, you could contact a local company that quickly buys houses. There are pros and cons to all three.

Selling the house yourself will save you money on commissions. Unfortunately, it can be a lot of work, and you could end up taking too long, or having to sell it even cheaper than expected.

Working with a Realtor can be a good way to get your home sold quickly if it is reasonable priced. The downside of course is the fact that you will have to pay a commission.

Selling to a home buying company can work out great. The advantages are that you will not pay a commission in most cases, and often times you will get a cash offer in 24-48 hours. The potential downside is that the offer may be slightly low, but the trade off is the speed at which your home will be sold.

When selling your home in Grand Rapids, I suggest you weigh your options. Try talking to a Grand Rapids Homebuyers company, and also find out how much a good Realtor can get you for the home.



Quick Property Sale

Firstly you need to know:

Who can extend?

You can apply to extend your lease only if you are what is known as a “Qualifying Tenant” under the 1993 Act. You are a Qualifying Tenant if:

1.) You are the tenant of a residential flat.

2.) You are not a business tenant.

3.) The original term of your lease was longer than 21 years (or contains an explicit right for perpetual renewal); and

4.) You have been the owner of the lease for at least two years.

You have the right to claim a lease extension from your landlord if:

1.) Your immediate landlord is the freeholder of the property (if your immediate landlord is a leaseholder, the question of an extension will depend on the length of the term your landlord has left on his lease); and

2.) Your landlord is not a charitable housing trust.

(NOTE: There are other leases which may qualify for renewal. If you are unclear please seek professional legal advice.)

After meeting the qualification guidlines the next big question is:

What will it cost?

You will need to pay a premium for the lease extension. The price is the cumulative total of the following:

1.) The diminution of the value of the landlord’s interest in the flat.

2.) 50% of the marriage value of the existing lease term and the additional 90 year lease; and

3.) The compensation for loss in clause of other property owned by the landlord.

The date on which the tenant applies for a lease extension will be the date of valuation.

In addition to paying you own legal fees you will also be required to pay the landlord’s legal fees and the costs of the valuation.

Some other very popular questions that have been asked on lease hold are:

What happens if I want to buy a leasehold flat and I want to extend the lease?

As you need to have owned the lease for at least two years you will not be able to extend the lease after you have acquired it. Therefore, it is common practice for the seller of the leasehold to make an application to extend the lease and then assign the benefit of the application to you as purchaser.

What lease will I be granted?

You have the right to be granted a lease of 90 years (plus the present unexpired term) from the expiry date of your current lease. The rent will be a peppercorn (i.e. rent free). The lease will be broadly on the same terms as your existing lease but may be subject to amendment (depending on any modifications, exclusions and/or additions to the demised premises).

It is worth noting that the landlord will retain a redevelopment right at the end of the existing term of the lease. The landlord will have to pay the full value of the remaining 90 year lease to you and the termination is subject to a court application by the landlord.

What is the procedure?

As a Qualifying Tenant your solicitors will serve a preliminary notice to obtain information from your landlord. Your solicitors will then serve the notice of claim which will state:

1.) Details of the property.

2.) Details of the lease (showing that you are a Qualifying Tenant);

3.) Details of the premium offered; and

4.) A date for the landlord’s counter-notice.

The landlord should then respond and will probably require payment of a deposit equal to 10% of the premium offered.

The landlord will value the premises and serve a counter-notice which will state whether they object to the claim.

If the parties cannot come to an agreement they can apply for the Leasehold Valuation Tribunal to determine the claim.

This article is free to republish provided the authors resource box below remains intact.



Quick House Sale

Homeowners in Phoenix Arizona that are thinking “my, my, my, how do I sell my house fast in the crazy Phoenix market” there is a solution to help you liquidate your home fast.  The market has been unforgiven the past few years and home owners need a quick way to sell their homes now.  Phoenix real estate agents can charge a hefty fee to Sell your House.  Some home owners just don’t have the equity to sell their house the traditional way especially since home values have dropped after their last purchase.

This market is putting homeowners back against the wall until.  The fastest way to sell a home in Phoenix is by going to Sell my Phoenix House Fast, a company that understands the need for speed.  They have helped homeowners that didn’t have any place else to turn, they even stepped in when real estate agents turned their backs. 

BofC knows that there are homeowners in Phoenix Arizona that might be facing foreclosure and have little to no equity and they have taken that into consideration that is why they put together some information for homeowners to learn about Short Sales.  Short sales have helped home owners that were about to lose their homes because they didn’t have equity and had nobody to turn too.

Now Phoenix homeowners that have given up or are about to give have a team in their corner to help them by setting up  purchase offer provided by BofC.  BofC have now set up contacts in the Phoenix area to allow them to do business in the area and purchase homes from owners that need to sell starting in 2009.



Sell House Quick