Mortgage Refinance Tips

Commercial Loan Modification For Home Loans - Mortgages Refinance Tips - Mortgage Lenders

Similar to the meltdown of the residential real estate loans in 2006, the Commercial Real Estate industry is already facing what will be a very similar situation. The difference? There's 1.4 trillion dollars worth of loans looking to mature in the next five years. What's worse is that a vast majority of these loans will be for amounts that far out-value the appraised value of the properties that back them. In other words, properties that are "upside down". Consequently, commercial borrowers are currently defaulting at a record pace and with the lack of financing available, they will all be facing a huge balloon payment.

The Ripple Effect

The economic downturn continues to affect the real estate market and this has been made very apparent by all the "For Lease" and "Going Out Of Business" sign going up everywhere. The effects of this of course, is a decrease in occupancy rates of commercial properties. This in turn puts a huge burden on commercial property owners when they attempt any of the refinancing routes mentioned previously. When these borrowers begin to default that will leave the banks with "underwater" commercial real estate. Not too long ago if a tenant happened to leave, there was a line of potential tenants just itching for a "prime location" to grow their business. Once again, the unique times we live in have made all these former tactics practically null and void.

Options for Commercial Financing

As mentioned previously, refinancing has always been the quick answer for commercial borrowers in a "pinch". This is impossible today when even "credit worthy" borrowers find themselves strictly scrutinized by their lenders. Needless to say that leaves many would-be borrowers in desperate need of a solution. Many of them feel alone and isolated in a no-win situation.

Fortunately, there are other options available.

When you are denied for the traditional commercial financing such as the 504 and 7(a) SBA loan, you can still opt to negotiate a commercial loan modification, resolution or workout. In fact, it may be in your favor to pursue any and all of these options and below are four key factors why...

1.) TERM EXTENSION: Certain properties that generate enough income to continue making their monthly payments, but have a high LTV (loan to value) percentage, can get the maturity date of the loan extended, thus allowing them to continue as they have been. 2.) AVOIDING FORECLOSURE: If you have already begun to get behind on mortgage payments you can ask for a workout or other resolution to keep the property. 3.) LESS STRINGENT GUIDELINES: Borrowers who have a good history of making payments are highly valued by lenders and they are willing to keep that relationship instead of starting a new one, so getting approved will be easier than if you were to start over. 4.) CASH FLOW: If there is a good positive cash flow, that is an excellent advantage to re-negotiating the loan.

Borrowers should keep in mind that financing options are available, and we're not just talking about the traditional ones. The more familiar you are with these other options the more likely a lender will be able to look at your situation and offer assistance. The very last thing a lender really wants to do is repossess a property. It makes more business sense to continue lending to a borrower that can sensibly show that it is in the bank's interest to help them as well. That of course is the tricky part.

Commercial Loan Modification For Home Loans - Mortgages Refinance Tips

Mortgage Refinance Tips

refinancing tips

Learn more about Commercial Loan Modification. Stop by Jonas Reed's site where you can find out all about commercial financing and what it can do for you.

Mortgage Refinance Tips: refinance loans