'Time is Money' it's an old adage. Good timing can also amount to the same thing. Taking action at the right time can make all the difference between an easy commercial mortgage transaction and a major headache of stress and panic. In between the lenders offer and the commitment consider undertaking what you can to ease your commercial mortgage deal by anticipating and dealing with any problems or hiccups that may occur.
Try to intercept any future problems or anticipate extra work that could stall your commercial mortgage deal at the critical moment. If you take a little time to consider what is required you should be able to deal with them one by one in plenty of time.
Once you have agreed to an offer from a lender and you are waiting for the commitment you should go ahead and run the title searches. The title work can be ordered by your real estate attorney from any number of companies that will risk loosing their title search fee if the commercial mortgage deal doesn't go through.
The title work is a very slow and labour intensive process, so the earlier you start it the quicker it will be completed. Starting it early will also allow for any delays or other issues that may pop up prior to the commercial mortgage completion.
The survey is another potential headache. Surveys have differing specifications and your new lender may have specific requirements of the survey that may not appear in your existing survey documents. Check with your lender exactly what they require of a survey and order it on receiving your offer rather than at closing. Most surveyors are very busy and they can have a very slow turnaround.
So again the sooner you can get it underway the easier it will be to deal with any hitches.
Cut down on your mortgage recording tax. Ask your lender to take an assignment of the old mortgage. Early in the deal process you should let your new lender's attorneys look over and approve the old mortgage. This is generally quite quick if you work with your own attorney to ease the process.
Consider the structure of your commercial loan. Does it cover any future plans you may have to modify your property? e.g. you may wish to convert your new property into multiple apartments. Does your loan account for the 'whittling' down of your asset as apartments are sold? This is a simple example but it's better to be upfront at the start about the plans you may have for the future of your property.
Along similar lines you would be well advised to consider the possibility of an early payment penalty if you plan to sell on your property within a few years.
Make a 'To Do' list and use and any spare time to work through it and clear it. There are enough things that can go wrong or cause delays as the deal nears completion. Clear what you can before you get to closing the deal, in this way you can give the mortgage agreement your full attention rather than worry about the other jobs that still need to be done.
Looking for a UK Commercial Mortgage? Commercial Lifeline are specialists in Commercial Mortgages, Bridging Finance and Buy to Let Mortgages.
This article comes with reprint rights. Feel free to reprint and distribute as you like. All that we ask is that you do not make any changes, that this resource text is include, and that the links above are intact.
Thursday, October 19, 2006
Why Use Bridging Finance?
Traditionally Bridging Finance, or Bridging Loan as it is also known, has been used to 'bridge' the financial gap between the sale of one property and the purchase of another. Allowing borrowers to purchase the second property before selling their existing property.
Numerous other uses for Bridging Finance include -
* Allowing Buy to Let investors achieve a discount for a faster completion
* Auction purchases, where funds are required quickly to complete the purchase
* Entrepreneurs requiring a quick injection of cash to fund a new business opportunity
* Property developers, utilizing the speed of Bridging loan to quickly buy and sell on a property
Fast Cash When You Need It Most
The traditional mortgage application route is well known for the snails pace at which it can sometimes operate. At the speed we live in today's postmodern age this can be a very frustrating state of affairs.
The property market has numerous opportunities but many can be left on the shelf. Either through the chain collapsing or the lender not having funds in place quickly enough. To add to this a discount on a property is a definite possibility if funding can be arranged quickly enough. Bridging Finance is a fast and easy solution to all these headaches.
But why is this? It's very simple. Bridging Finance tends to be 'Non-Status'. Lenders consider the type and quality of the property as security as a measure of the lending possibility.
Unlike traditional lending bridging underwriters are generally looking at minimum lending terms of between 3 months, 6 months or 12 months. But some lenders are even more flexible in this regard and will lend with no minimum period on the loan. Lending is available at up to 75% LTV (Loan-To-Value), in some cases 85% LTV may be available. Apart from credit checks, the non-status factor is the same as mainstream non-status lending. The benefit is that the decision to lend is very much faster.
A Short Term Solution
Bridging Finance can bridge a financial gap. But it should never really be considered a permanent solution. A more permanent solution in the form of a regular mortgage should be considered if the property is to be held on to long-term. Or in the case of a more speculative investment the borrower will sell the property to make a quick profit.
Bridging Finance is flexible in another way. In terms of the redemption date it can set as both 'open' with no definite end to the loan, or 'closed' with a set redemption date. It is advisable to only use the open variety when you are confident of the sale of a property or the replacing of the loan with a more long-term finance solution.
Bridging Finance remains the fastest and most appropriate loan type for making a property purchase quickly.
About the Author
Looking for UK Bridging Finance? Commercial Lifeline are Bridging Finance specialists.
This article comes with reprint rights. Feel free to reprint and distribute as you like. All that we ask is that you do not make any changes, that this resource text is include, and that the links above are intact.
Numerous other uses for Bridging Finance include -
* Allowing Buy to Let investors achieve a discount for a faster completion
* Auction purchases, where funds are required quickly to complete the purchase
* Entrepreneurs requiring a quick injection of cash to fund a new business opportunity
* Property developers, utilizing the speed of Bridging loan to quickly buy and sell on a property
Fast Cash When You Need It Most
The traditional mortgage application route is well known for the snails pace at which it can sometimes operate. At the speed we live in today's postmodern age this can be a very frustrating state of affairs.
The property market has numerous opportunities but many can be left on the shelf. Either through the chain collapsing or the lender not having funds in place quickly enough. To add to this a discount on a property is a definite possibility if funding can be arranged quickly enough. Bridging Finance is a fast and easy solution to all these headaches.
But why is this? It's very simple. Bridging Finance tends to be 'Non-Status'. Lenders consider the type and quality of the property as security as a measure of the lending possibility.
Unlike traditional lending bridging underwriters are generally looking at minimum lending terms of between 3 months, 6 months or 12 months. But some lenders are even more flexible in this regard and will lend with no minimum period on the loan. Lending is available at up to 75% LTV (Loan-To-Value), in some cases 85% LTV may be available. Apart from credit checks, the non-status factor is the same as mainstream non-status lending. The benefit is that the decision to lend is very much faster.
A Short Term Solution
Bridging Finance can bridge a financial gap. But it should never really be considered a permanent solution. A more permanent solution in the form of a regular mortgage should be considered if the property is to be held on to long-term. Or in the case of a more speculative investment the borrower will sell the property to make a quick profit.
Bridging Finance is flexible in another way. In terms of the redemption date it can set as both 'open' with no definite end to the loan, or 'closed' with a set redemption date. It is advisable to only use the open variety when you are confident of the sale of a property or the replacing of the loan with a more long-term finance solution.
Bridging Finance remains the fastest and most appropriate loan type for making a property purchase quickly.
About the Author
Looking for UK Bridging Finance? Commercial Lifeline are Bridging Finance specialists.
This article comes with reprint rights. Feel free to reprint and distribute as you like. All that we ask is that you do not make any changes, that this resource text is include, and that the links above are intact.
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