Below are a few of the typical questions we field on a daily basis regarding Commercial Mortgage Refinance’s.

How long does it take to close?

The time to close is universally under estimated by banks, lenders and brokers. Many firms advertise 30 days, which is simply not the norm. Despite borrower’s frustration and confusion on why it takes as long as it does to close, the reality is that it is odd for a commercial mortgage to close in less than 60 days.

Oddly, one of the biggest delays actually is caused by the borrower’s inability and or reluctance to provide requested information. The borrower can have a huge impact on shortening the process by responding quickly to the lenders requests, even if they seem irrelevant or ridiculous.

What are the fees?

On a commercial mortgage refinance the borrower can expect to pay a bank fee of 1%, lender processing fee of approximately $1000, an appraisal will cost $2,000 – $5,000, title ranges from $800 – $2000, environmental report will cost between $800 – $1,800. The larger and more complex the deal the higher the costs generally will be.

What are my loan options?

The classic bank loan for owner occupant is a 5 year fixed, 20 year amortization program. In the wider market, options range from interest only, to 1 year adjustable, to 30 year fixed. Some lenders have created “stated income loans” where the borrower provides a limited amount of documentation.

What are prepayment penalties?

Prepayment penalties are a way for lenders to preserve their return on funding loans, if the mortgage is prematurely paid off. From the borrowers perspective this is a negative feature that tacks on an additional fee, which is in the form of a percentage of the remaining balance. For example, 5% for 5 years, prepay is market. In means that if the borrower was to sells on refinance the loan within that 5 year period he would owe 5% of the existing loan balance.

What is the application process?

Normally, after a preliminary verbal review of quotes and loan programs the borrower will be expected to fill out an application and provide documentation. Three years of business and personal tax returns, year to date profit & loss and balance sheets are requested. After a review of the above, the lender will issue a Letter of Intent which lists the terms of the potential loan. Assuming the borrower wants to move to the next step, they will be expected to sign off on the LOI, although this is not a binding step. At this point the lender will engage an underwriter(s) to thoroughly review the funding request.

If approved, the bank will issue a full Commitment Letter which is a binding documentation for both the bank and borrower. At this point and if agreeable to the borrower they’ll be expected to execute the Commitment Letter, provide money for the appraisal, environmental report, and processing fee. The loan has at this point been officially engaged.

Keep in mind that it is in the borrowers benefit to have their loan thoroughly reviewed before they commit to a lender so as they do not waste additional time and money on 3rd party reports.

248 885-8797 Jeff Rauth is President of Commercial Finance Advisors, Inc out of Birmingham, Michigan. He specializes in Commercial Real Estate Loans between $300,000 – $5,000,000. Offers unique loan programs such as Commercial Second Mortgages, Commercial 30 Year Fixed and 90% non SBA financing, and Commercial Equity Lines. 248 885-8797 Commercial real estate loans or SBA 7a Loan Commercial Loan Brokers
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There are many people who consider getting a mortgage. Honestly, this is a very common practice. The again, some things about it must be made clear.

For instance, there is such a thing as a lock in mortgage rate. This can save you a lot of money, but you need to know if your lender provides it. They might be quoting a difference price that pretends to add the lock-in mortgage rate option. After all, there exists a difference between the two. A quoted mortgage at the time of the application process could change. This simply means the original quote could be adjusted to reflect a new and higher quote – all done in a very legal manner. Such would most likely cost you more than what you originally bargained for and you could find yourself in for a very unpleasant surprise.

But of course, getting the lock in mortgage rate approval from your lender will be able to remedy that – especially since it is legally binding and you are assured of the same rate even as the deal gets closed. There are also some six simple guidelines that will help you take advantage of that lock in mortgage rate.

First, you have to follow the said time frame. It is very simple, but if you mess it up then you are going to have a few things to worry about – such as the validity of your lock in mortgage rate. Second, you have to aim for a realistic type of lock-in period agreement with your lender. If the lock-in mortgage rate expires then you will be three weeks delayed in getting the new loan for the property. Third, make it a point to keep all the things in place. You have to have enough skills to predict unforeseen obstacles which may creep up. Settle all documents to avoid any of these obstacles. Third, see if the time is right to get the lock in period. This might be better to get if the interest rates are getting high because then you are assured of a ceiling. Fourth, check if the lender can accord you a lower option for rates. They might be able to give a float down that will greatly help you in the long run. Fifth, be very aware of a rate cap clause. Read everything carefully because if this gets in your contract there is a .25% to .50% cap. And finally, ensure that you get the rate of the lock in mortgage in writing. Verbal is never enough. Some lenders will try to worm their way out of the agreement if it is verbal. In this case, one needs to be thoroughly vigilant and confirm the agreement of the lock in rate in writing. When you do, not only is it binding but it is completely transparent that no one could go above or beyond it.

These are six handy solutions connected to lock in rates. It’s good to peruse them carefully. If you do, you could be saved from many bothersome things in the future.

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About the Author:
Rob K. Blake, home loan expert and author, educates mortgage shoppers on finding local providers by state like Delaware Mortgage Brokers and Lenders and provides reviews of national companies like America’s Servicing Company.
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One of the most dreaded scenarios that homeowners have to face is having their home loans disapproved. If you are looking for ways to finance your monthly mortgage which suddenly seems to be too expensive for your household budget, what options do you have? 
Fortunately, the federal government has initiated several programs and a lot of incentives for homeowners. The Home Affordable Modification Plan (HAMP), for example, is something that will allow you to qualify for a lower monthly payment through loan modification. 
All you need to do is determine if you qualify for HAMP, submit an application with a loan servicer, ensure that your debt-to-income ration is at least 31% and undergo the income verification process and trial period. 
Things to Remember when Applying for HAMP through Bank of America 
Since the option to modify your loan through the HAMP program was introduced as part of President Barack Obama’s stimulus plan, a lot of homeowners lined up to take advantage of it. The problem is that if you are applying for the program through financial institutions like the Bank of America, there are a lot of instances when the application gets denied. 
What if you’re already facing a foreclosure and your HAMP application through the Bank of America got denied?  This is a scenario which is less-than-desirable – so in order to counteract the frustrations that you might feel during the process, here are a few things that you need to keep in mind: 1. Exercise a lot of patience during the application process. Did you know that there are a lot of homeowners who applied for the HAMP loan modification program for two to more than five times? At one point or another, their reapplication got approved – although if you’re the impatient type, you may not reach this point as a result of being frustrated. 
What’s important is to make sure that you are aware that it is possible to turn no into a yes – as long as you put your financial records in order to increase your chances of having HAMP approved the second, third, fourth or even fifth time around. 
In relation to this, it would also help if you will treat the loan services with friendliness and patience – having the right attitude simply makes going through the process feel a lot better.  
2. Make sure that all the necessary paperworks are in order. One of the most common reasons why HAMP applications get denied in the first place is that applicants do not submit all the necessary paperwork. To increase your chances of getting approved, make sure to submit all the requirements needed for the income verification process. 
3. Escalate your request from one level to another if you need to. Again, as a result of the President Obama’s stimulus plan, financial institutions like the Bank of America got flooded with HAMP requests. So it is no wonder why a lot of applications end up getting denied. If this happens to you and you know that you qualify for the loan, don’t hesitate to escalate your request from one level to another. Make follow-up calls and learn about the loan application process inside out. 
Patience, persistence and knowledge about the process are the keys if you would like to have your home loans approved after having been denied. As long as you know that it is possible for you to resend your application, there will be higher chances of finally getting your loan modified so that you will have more borrower-friendly terms.

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About the Author:
Rob K. Blake, mortgage expert and author, educates mortgage shoppers on finding local providers by state like Kentucky Mortgage Brokers and Lenders and provides reviews of national companies like Alternative Home Financing.
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Please Note... All links within articles are placed by their author-owners and not by this blog.Products with in those links may or may not be the best in the world.If it sounds too good to be true it could be a scam.Articles are posted for their info,ideas and or entertainment value only.

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