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Investors who are seeking commercial financing should choose their mortgage company wisely. The tight credit markets of today are creating a new breed of mortgage marketeers. The majority of them are pitching easy financing with up 100% LTV loans. You should be aware of these mortgage companies and ask the right questions. Obviously, there is no such animal as a 100% LTV product in this market place. The only exception is the Federal Funding EquiFund Program which enhances primary financing with equity funding raising the LTV levels up to 100% LTV subject to the property's equity position.
Your key inquiry should be your qualifications and how realistic they are in securing a mortgage. Commercial mortgage brokers overall provide a good service to investors wanting to purchase investment property. They have relationships with a multitude of lenders and can place your loan with the "right" lender sparing you the frustration of countless hours scouring the Internet in search of the right lender. Here is what you should ask before diving in too deep.
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Do I have sufficient assets to qualify for the loan?
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Will the lender approve my loan even if I don't have experience?
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Do I need an audited financial statement?
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Do my funds have to be seasoned?
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Will the lender perform a "quick sale" appraisal?
Your mortgage broker or loan officer should know the answers to the above questions. If not, then you should bail out before you invest your hard earned money in application fees, appraisals and lender good faith deposits, otherwise you will be in for a last minute surprise which will not be a happy one. It is good to know if your loan officer is an investor themselves and how many times they have been to the closing table. Experience in this business matters and if you don't have it, you won't succeed, much less being able to help your client. Remember, ask questions first and don't be deterred if the loan officer redirects your questions to the fact the mortgage broker has been in the business for many years, blah, blah, blah. Just ask the right questions and be persistent!
Regards,
Richard David
richard@bancofino.com
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