Monthly Archives: May 2017

Real Estate Loans

It is in fact true that, nothing other than a mortgage or real estate loan would lend you a helping hand when there is a ruthless need for financial support. Several organizations offering banking solutions are existing throughout the world that play a vital role in fueling the progress of economy. The need for loans and financial advances in businesses and personal lives is so vast, thereby making them center function of thousands of banks and institutions. Bank loan usually come in handy when individuals are out of liquid cash to transact. Banks lend out huge sums of money to individuals to spend on their daily needs.

There are a lot of factors to be considered on whether to take a bank loan or not. The foremost thing that matters is the need for loan. You aren’t eligible to take a loan, if you are unemployed. A mortgage or real estate loan comes to help you out under such situations. These real estate loans are offered by the lenders to individuals who own a property. These lenders generally make loans based on the income and credit of the borrower, and they generally follow standard lending guidelines. Private lenders are individuals or small companies that do not have insured depositors and are generally not regulated by the federal government. Institutional lenders are large reputed companies that include commercial banks, savings and loans, credit unions, mortgage banking companies, pension funds, and insurance companies.

Primary mortgage lenders are those who directly deal with the public. They lend money directly to the borrowers. They make their profit from loan processing fees and not from the interest paid on the loan. These lenders sell the mortgage notes to investors on the secondary mortgage market to replenish their cash reserves. In addition to a few government associations, several private financial institutions such as banks, private investors, life insurance companies and thrift associations also buy notes. Interest rate is one of the most important factors, when it comes to a real estate loan. Interest rates affect monthly payments, which in turn affects how much you can afford to pay for a property. It is very important to check all the borrowing conditions made by the banks and private lenders, before signing the loan. Since the real estate or mortgage loan is being taken on your property, ensure that the borrowed money is effectively used for that purpose. Finally, whether or not to take the bank loan largely depends on the need at hand and the cost of the loan in interest terms.

Commercial Real Estate Loans

Boise is still heavily populated and has the sustainable factor to draw people to work and reside. The city has fully integrated real estate brokerage firms that provide loans and other solutions related to properties in many counties. Idaho also boasts of other attractive locations like Nampa, Caldwell, Meridian, Star, and Eagle. For some people getting commercial real estate loans at this juncture could be tricky. Mortgage rules come with more riders and clauses. In such a scenario how can one still get the loan for a property already identified and ideal for business operations? The current credit crisis has certainly caused leaders to be more cautious in their leasing habits to buyers. But real estate firms that have survived volatile market habits know just how to circumvent the crisis and help buyers. Firms that have not outstretched their loan limits are still standing in the ring. In Boise alone, the ground realities have thawed with phones ringing in offices.

Vacant plots, properties and other retail space in counties like Ada County, Canyon County, and Valley are seeing renewed commercial activity. Even in today’s market, long term investments can be made with the right advisories. As the sellers have become more grounded in realties the commercial real estate loans are being discussed positively. Prospective buyers are now relying on experienced professionals and consultants to help them to make decisions to make investments. Business now operating on lower rents has helped tenants to save on their monies. But let it be known that all purchases will not be cheap. As commercial real estate loans in some prominent areas are bound attract more buyers because of their location. Sellers who have properties in such areas can still command better prices. The ‘trophy properties’ can still be eyed with the help of easy mortgage in installments. The banks are also ready to back the ‘trophy properties’ as there is a good yield.

Brokers are advising buyers to take the risk as markets stabilize in and around the capital city in Idaho. They have dealt with the worst in the last few years and can feel the pulse. They can also help with the required commercial real estate loans that are needed. In fact, they are better positioned to re-valuate a property, find realistic prices and help the seller and buyer to agree mutually. Providing funds for commercial activity is an essential service for a buyer. Right now the loans are pretty lower as few high value properties are available. Now the lenders are also under pressure and helping buyers to get smaller loans. This ensures that the risks are not very high. This is the time when secondary markets are showing better activity. If commercial real estate loans are to be picked up then the smaller counties are better positioned for loan application deals. For a place like Boise it is certainly an encouraging piece of news. Financing is available in such markets easily and lenders are now open to them for business.

Farm Real Estate Loans

Whether you are a farmer with a small piece of agricultural land or whether you have hundreds of acres of farm land, you might need farm real estate loans to satisfy some of the urgent farming requirements. Some of the most common farm real estate loans available include:

Crop Production Loans: This is one of the important farm real estate loans available and is availed of by farmers most often than not. The highlight of this loan is that it focuses on seasonal borrowings for any crop production and this is normally structured on the basis of non-revolving lines of credit that has a maturity date, which will eventually coincide with the planned commodity sales. The margin requirement for this loan is normally 30% and is usually met with either a cash down payment or assignment of government payments, equity in equipment, and any type of collateral.

Livestock loans including cow/calf Loans: Livestock loans have been designed for cattle purchases. These farm real estate loans are normally structured in such a way that farmers will have to make annual payments and the payment dates normally coincide with the expected cow/calf sales dates. The loans offer annual renewable lines of credit as well as the opportunity to cover any type of seasonal borrowing need for the farm or the ranch or for any type of operating expenses on the farm land. The annual lines of credit are governed by the periodic Borrowing Base Certificates. The margin requirement in livestock loan is normally 25% and is usually met with either a cash down payment or by cattle owned by the farmer or any other type of collateral.

Feeder loans: Feeder loans are type of farm real estate loans that are quite flexible. A feeder loan can be structured according to individual requirements for covering specific programs or it can be used as an annual renewable line of credit. The revolving lines of credit in feeder loans are usually governed by periodic Borrowing Base Certificates. The margin loans requirement is that of 25% and it can be easily met either through a cash down payment or through cattle already owned by the farmer or any other type of collateral.

Agri-business Loans: There are different types of farm real estate loans available and one such loan is the agri-business loan. The agri-business loans are usually used for creating working capital, equipment financing, and sometimes even as inventory loans in order to meet a seasonal requirement or even a permanent need.

Grain Facility Loans: This is another type of far real estate loans and focuses mainly on financing merchandising operations and grain storage. This is a type of loan that can easily be structured on the basis of annual renewable lines of credit for the grain ware-housemen. It can also be structured according to individual requirement including specific merchandising needs or specific grain contracts. The margin requirement for this type of loan will vary depending certain aspects like the commodity being hedged, open, optioned, or cash forwarded. Farmers can meet the margin requirements through existing or currently owned commodities, cash margin, equity in commodity hedge accounts, or any other type of collateral.

Successful Commercial Real Estate Loan Brokers

Commercial real estate loans are your best options if you want to buy real estate for commercial purposes. These types of loans can be used to purchase any kind of commercial property such as apartments, hotels, office buildings, health care clinics, shops and many more. They can be extremely beneficial for business owners who are trying to establish a new business, or expand an already established one. Moreover, commercial real estate loans can also help individuals in refinancing their existing debts.

There are a number of lending companies, banks and building societies providing these types of loans. However, it can be a convenient option for borrowers to avail loans from online lenders owing to the fact that online processes are much faster and enable borrowers to make a comparison among various commercial loan rates. A loan broker can play a significant role in helping borrowers to find the most suitable lender based on their requirements.

A real estate loan broker plays the role of an intermediary connecting a potential borrower with lenders who are willing to provide them loans. In simpler words, they offer assistance to potential buyers in the process of applying for and obtaining loans. In most cases, they not only connect the borrower with the lender, but also help in preparing the documents needed for the loan application.

There are certain essential factors that need to be kept in mind in order to pursue a successful career in commercial real estate loan brokering.

Appropriate Education: Usually, to have a career in loan brokering, it is sufficient to hold a high school diploma. However, having good knowledge in subjects like business, economics, finance and communication can help individuals immensely in getting a proper understanding of the financial conditions of a loan applicant. It also helps them understand loan statements thoroughly.

Adequate Training: It is advisable to undergo adequate training in loan brokering in order to acquire and develop skills and knowledge required to connect borrowers with the most suitable lenders, and help them secure loans conveniently. You can choose between the various training options available for individuals to become loan brokers, such as working with financial institutions or joining some kind of fresher training courses sponsored by companies or simply joining an online program.

License: Getting a license in loan brokering may not be compulsory in all states, but can be helpful in becoming successful in the business. Individuals may opt for passing a loan brokerage exam and acquire a license in the field. In order to get through these exams, it is essential to answer at least 75% of the questions correctly.

How to Start the Business: It is important for individuals to decide on the way they would like to start their business of loan brokering. While some may choose to start their career by working for other loan brokers or brokerage firms, others may opt for starting a business of their own. However, it should be remembered that if you choose to work independently, it is essential for you to have an excellent marketing plan for your business, in order to let people know that you are working as a loan broker.