have a few questions about commercial mortgage refinance? Few are the most typical questions we asked on a daily basis.
time - will it really take 30 days to close
?
No, unfortunately it will probably take longer than 30 days from start to finish to close the loan. 60 days is really ruled by the average job, although 45 days is feasible. 30 days estimated by the universal banks, lenders and brokers. If someone tells you that they can close the loan in 30, they no rookie, or just trying to tie up your loan. Which, of course, is a really bad way to start the transaction.
Despite its potential for frustration and aggravation as to why it takes so long, it better just to accept the process and be diligent in submitting all the required documentation as possible from the bank. One of the biggest delay was the inability of the borrower, or just planning a reluctance to provide the necessary items. Too often, the borrower is considered reasonable that the bank only to be overly conservative and thorough. All this makes it easy to stall the process. When prompted, banks rarely give up the necessary documentation.
What are the benefits?
They really are pretty much the same across the board. There is usually 1% bank fee, lenders will often have a processing fee of around $ 1000, review of reports ranging in price from $ 2,000 - $ 5,000 (although it is not uncommon to see estimates more like $ 10,000 or more on larger, special purpose properties) , title ranges from $ 800 - $ 2000 again depending on the amount of loans / state, a single phase environmental report will cost about $ 1,500 - $ 2,000. Some properties such as multifamily normally does not have environmental benefits, or if not it will be more ecological research, which costs about $ 800.
What can I expect for the loan programs?
really varies widely, depending on the job. Amortization period of 15-30 years, a fixed period of floating up to 30 years, said income tax, 0.8 DCR minimum of 90% financing, etc. Also, it pays for the borrower to keep in mind that banks can use the same loan program, but you roll it in different ways. For example 99% of banks offer SBA 7a loan as floating product. However, there are a few that offer it as a 5 year fixed, 25 years amortization loans.
What is a prepayment penalty, and they can get out of it?
Prepayment penalties are fees incurred if borrowers pay off the loan, any asset sales or refinancing of debt, before the agreed razdoblje.Vrijeme is usually between 3 -5 years with some CMBS lenders go as long as 10 godina.Naknada almost always as a percentage of the loan balance, or 3 to 5% of the loan amount. In other words, if the loan amount is $ 1,000,000, and the borrower is a 5% pay in advance to make it cost $ 50,000 to pay off the loan early.
This sense out of it, it is possible, although the pool of lenders who offer this greatly reduced. It is likely, and it was a hit, 1 of 100 banks and lenders will not give up either directly or more likely to seek an increase in interest rates in order to justify a compromise. I'm referring to the new loan. Once in place, you're pretty much stuck (although you could look into defeasanse or other borrower takes a loan). We are working with a bank in Virginia, which is usually waives all subscriptions, although their rates are a little high.
What is the application process?
What is the application process?
...
The Borrower agrees to move forward with the bank / lender will be asked to fill out an application and provide documentation. What is usually asking for personal financial report, three years of business and personal tax returns, year to date profit and loss statements and balance of the year. After a full "scrub" up against the risk, the lender typically issues term sheet, which itemizes the offer of the bank. Its normally a few pages, and lists of major problems, such as rate, amortization period, etc., and less problems with of course involves a lot of small print to protect the bank. If the borrower wants to move forward they will have to sign a letter and write a check to the bank to cover assessment, environmental protection, and sometimes treatment.
...
This is a good idea for the borrower to be patient and encourage banks to be as thorough as possible with its preliminary risk, so do not waste your time and money on a third report, as it can be difficult to get a "refund".