Submitted by Naomi M on Sat, 12/29/2007 - 23:19.
Owner Occupied Commercial Mortgage Loans
Lenders are making it easier for business owners to obtain an owner-occupied commercial mortgage loan with as much leverage as 90% to 97% LTV. You can also use this commercial real estate loan for a refinance including cash-out if you already own a commercial building for your business or practice.
Business owner or professional practice benefits
The option to own a commercial building with just a 10% down payment allows many more business owners to move from being a tenant to enjoying the benefits of property ownership including controlling operating costs, no landlord restrictions and real estate appreciation. This is a non-SBA loan.
Loan amounts
Loan amounts range from $100,000 up to $5,000,000 for many property types. This is a very generous range that should help nearly all business owners obtain an owner-occupied commercial loan.
Property types eligible for an owner-occupied commercial mortgage
Apartment or Multi-family 5+ units (7 units in NJ)
Automotive Dealership
Automotive Repair, Body Shop
Bed and Breakfast (B&B)
Convenience Store (no gas)
Dry Cleaners
Funeral Home
Heavy Industrial
Light Industrial
Marine Shop
Mixed Use
Mobile Home Parks
Office, Office Condos
Retail, strip centers, shopping centers
Self-Storage
Trucking yards
Warehouse
General Qualifying Guidelines
Here a few key qualifications for a 90% to 97% LTV owner-occupied commercial real estate loan.
Credit: Minimum middle score of 660. However, 680 or higher will give you better leverage.
Minimum of 2 years in business.
Must owner-occupy at least 51% of the building.
Income: Full Doc and Stated Income Programs
Some lenders will allow you to use all income sources. This means you can use the rental income from the commercial building as well as other income sources you have such as your employment income, retirement income, etc. This flexibility is ideal for commercial properties that do not cash-flow.
No state restrictions. This loan program is available in all 50 states.
Use this commercial real estate program for purchase, refinance including cash-out.
Choose from a fixed rate period ranging from 2 years to 30 years.
Comments
Credit Issues: If your credit is below 680 but at least 640 it is still possible to obtain a commercial loan for the properties listed above. The down payment requirement will be higher, typically 20% down.
Another solution to a credit score currently below 680 is to initially work on raising or boosting your score before applying for a commercial loan.
There are two primary methods used to boost your FICO score and raise your credit rating
[1] Improve your Debt-To-Credit Ratio
Your Debt-To-Credit Ratio is the total amount of debt in relation to your credit limit. For example, if you had $5,000 in high credit and you were $2,500 in debt on that $5,000, your debt-to-credit ration would be 50%. You want to get that figure down to a maximum of 30% and no less than 10%. The two ways to improve this ratio is to pay down your debts or increase your credit limit.
[2] Remove derogatory credit items from your credit report
Derogatory accounts on your credit report such as slow pays, hard inquiries, judgments, collections, repos, foreclosure, and bankruptcy are pulling your credit score down. You can legally remove these types of bad marks, even if they are yours, using the strategies explained in the Credit & Debt Solutions section of this website. I recommend The Credit Secrets Bible as your guide to improving your credit profile and boosting your credit score to 680 or higher.
Summary
Commercial property ownership is a viable goal with the loan programs currently available such as the owner-occupied commercial mortgage loan discussed in this article. If you need help or have questions on how to position yourself to qualify for a commercial mortgage, contact me today by email. If you are ready to apply for a commercial loan just fill in a simple online application form. It’s free; there’s no credit check and without obligation.
Business owner or professional practice benefits
The option to own a commercial building with just a 10% down payment allows many more business owners to move from being a tenant to enjoying the benefits of property ownership including controlling operating costs, no landlord restrictions and real estate appreciation. This is a non-SBA loan.
Loan amounts
Loan amounts range from $100,000 up to $5,000,000 for many property types. This is a very generous range that should help nearly all business owners obtain an owner-occupied commercial loan.
Property types eligible for an owner-occupied commercial mortgage
Apartment or Multi-family 5+ units (7 units in NJ) Automotive Dealership Automotive Repair, Body Shop Bed and Breakfast (B&B) Convenience Store (no gas) Dry Cleaners Funeral Home Heavy Industrial Light Industrial Marine Shop Mixed Use Mobile Home Parks Office, Office Condos Retail, strip centers, shopping centers Self-Storage Trucking yards Warehouse General Qualifying Guidelines
Here a few key qualifications for a 90% to 97% LTV owner-occupied commercial real estate loan.
Credit: Minimum middle score of 660. However, 680 or higher will give you better leverage. Minimum of 2 years in business. Must owner-occupy at least 51% of the building. Income: Full Doc and Stated Income Programs Some lenders will allow you to use all income sources. This means you can use the rental income from the commercial building as well as other income sources you have such as your employment income, retirement income, etc. This flexibility is ideal for commercial properties that do not cash-flow.
No state restrictions. This loan program is available in all 50 states. Use this commercial real estate program for purchase, refinance including cash-out. Choose from a fixed rate period ranging from 2 years to 30 years. Comments
Credit Issues: If your credit is below 680 but at least 640 it is still possible to obtain a commercial loan for the properties listed above. The down payment requirement will be higher, typically 20% down.
Another solution to a credit score currently below 680 is to initially work on raising or boosting your score before applying for a commercial loan.
There are two primary methods used to boost your FICO score and raise your credit rating
[1] Improve your Debt-To-Credit Ratio
Your Debt-To-Credit Ratio is the total amount of debt in relation to your credit limit. For example, if you had $5,000 in high credit and you were $2,500 in debt on that $5,000, your debt-to-credit ration would be 50%. You want to get that figure down to a maximum of 30% and no less than 10%. The two ways to improve this ratio is to pay down your debts or increase your credit limit.
[2] Remove derogatory credit items from your credit report
Derogatory accounts on your credit report such as slow pays, hard inquiries, judgments, collections, repos, foreclosure, and bankruptcy are pulling your credit score down. You can legally remove these types of bad marks, even if they are yours, using the strategies explained in the Credit & Debt Solutions section of this website. I recommend The Credit Secrets Bible as your guide to improving your credit profile and boosting your credit score to 680 or higher.
Summary
Commercial property ownership is a viable goal with the loan programs currently available such as the owner-occupied commercial mortgage loan discussed in this article. If you need help or have questions on how to position yourself to qualify for a commercial mortgage, contact me today by email. If you are ready to apply for a commercial loan just fill in a simple online application form. It’s free; there’s no credit check and without obligation.
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