Mortgage Funding Info

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The reason why most commercial mortgage deals don't get funded is not because you can't find a lender. More often than not, the reason can be traced back to the "presentation" of the loan request. For example, when completing a residential loan, you fill out a 1003 using Point, Genesis, or another FNMA 1003 program. For a commercial loan request, what do you fill out?

Since there is no uniform commercial mortgage application, most brokers submit a 1003, an operating statement, and possibly a rent roll. However, this would be akin to submitting only the borrower's tax return and pay stubs, expecting a preliminary approval. In other words, it is clearly inadequate.

"As lenders we see hundreds of loan requests, and most of these requests are incomplete and poorly prepared," says Chris Lewis, VP of Commercial Lending for Wells Fargo, Los Angeles. "Complete loan requests, however, go to the top of the stack as this shows that the broker understands the issues and has some control over the deal."

Packaging a commercial mortgage loan is significantly different than packaging a residential loan. The main difference is that you need to determine whether the property -- not the borrower -- is generating sufficient "rental" income to cover the mortgage payments on the proposed loan amount (e.g., DSCR), and whether there is commensurate value to meet the lenders' loan-to-value requirement (e.g., LTV).

To calculate the DSCR and LTV, the stabilized net cash flow (NCF) must be determined. In most cases, lenders must re-create the operating statements to conform to their respective underwriting models, which requires identifying certain property-specific expenses.

La Canada Flintridge Real Estate

Sun, 26 Feb 2012 23:05:04 +0000

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Arcadia CA Real Estate

Sun, 26 Feb 2012 23:05:04 +0000

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Credit Info

Sun, 26 Feb 2012 23:05:04 +0000

Did you know that 75% of all mortgage lenders use a three-digit credit score to determine your loan eligibility? This score is based on the information contained in your credit report. And the interest rate you will be charged is based on your credit score, so raising your credit score as little as 15 points could result in a lower interest rate and thousands in savings. You can save anywhere from a few hundred dollars in credit card interest charges, thousands of dollars on your next car loan, and tens of thousands of dollars on a mortgage loan simply by improving your credit score as much as possible.

The information below offers general guidelines as to what your credit score might be. Each lender sets its own guidelines for approving loans and issuing credit. For this reason, the information below offers only general guidelines. Your debt-to-income ratio also plays a role in determining whether or not you will be issued credit. Some lenders require a debt-to-income ratio that may be higher or lower than those stated below. See bottom of this page to find out how to calculate your debt-to-income ratio.

The information below is based on the FICO scoring model which ranges from about 375 to 900. Other lenders might use their own in-house scoring systems or another scoring model. General rules to determine your credit score and creditworthiness are as follows:

A rating [Credit score 660 or higher] -- You can easily obtain financing at the best rate; you can get approved for a credit card online in a few seconds. Note that a score above 700 means you have extremely good credit.

Typical debt- to- income ratio: Below 35%

Mortgage: You have not been late with a payment in the last 24 months

Installment loan: You have been 30 days late making payments 0 or 1 time within the last 12 to 24 months

Revolving credit: You have been 30 or 60 days late with a payment 0 or 1 time in the last 12 to 24 months

Additional requirements: Good/excellent credit during the last 2 to 5 years; no bankruptcy within the last 2 to 10 years

B rating [Minimum credit score 620] You can get approved, but not at lowest rate. You can get credit cards and such, but at a higher rate than someone with an A rating.

Typical debt-to-income ratio: Around 50%

Mortgage: You have been 30 days late with a payment 2 or 3 times in the last 12 months

Installment Loan: You have been 30 days late with a payment 2 to 4 times during the last 12 months

Revolving credit: You have been 30 days late with a payment 0 to 2 times in the last 12 months

Additional requirements: You have no 60-day late mortgage payments; if filed bankruptcy, it must be discharged 2 to 4 years ago

C rating [Minimum credit score 580] Have trouble getting approved. Very high rates.

The lender might ask you to get someone to co-sign for you.

Typical debt-to-income ratio: 55% or higher

Mortgage: You have been 30 days late with a payment 3 or 4 times in the last 12 months

Installment Loan: You have been 30 days late with a payment 4 to 6 times during the last 12 months

Revolving credit: You have been 60 days late with a payment 2 to 4 times in the last 12 months

Additional requirements: If you filed bankruptcy, it was discharged 1 or 2 years ago

D rating [Minimum credit score 550] Serious trouble getting approved. Co-signor required.

Typical debt-to-income ratio: Around 60%

Mortgage: You have been 30 days late with a payment 2 to 6 times in the last 12 months; and 60 days late 1 to 2 times during the last 12 months

Installment Loan: You have a few 90 and 120 day late payments during the last 12 months

Revolving credit: You have a few 90 and 120 day late payments during the last 12 months

Additional requirements: If you filed bankruptcy, was discharged within last 12 months

E rating [Credit score under 550] Unlikely to be approved.

Typical debt-to-income ratio: Around 65%

Mortgage: You have a pattern of 20, 60, 90 and/or 120 day late payments

Installment Loan: You have a pattern of 20, 60, 90 and/or 120 day late payments

Revolving credit: You have a pattern of 20, 60, 90 and/or 120 day late payments

Additional requirements: You may have a current bankruptcy or foreclosure

How to Calculate Your Debt-to-Income Ratio

The formula for calculating your debt-to-income ratio is monthly fixed expenses divided by gross monthly income (before taxes and deductions). Monthly fixed expenses include all debt, such as the following: house payment or lease, credit card and other revolving credit balances that it will take you longer than 6 months to pay off; car payments, alimony, child support, etc. Do not include grocery, telephone, and utility bills or any debt that will be paid off in the next few months.

Sample calculation:

Gross monthly household income: $5,000

Fixed expenses: $1,560

[house payment $540.00 + car payment $370.00 + credit cards $250.00 + child support $400.00]

Debt-to-income ratio calculation:

$1,560

$5,000 = 31%

Fico Scores Effect Purchasing

Sun, 26 Feb 2012 23:05:04 +0000

Fico Scores Effect Purchasing

Homes for Sale

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Homes for Sale

Realtor

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Realtor

Property Rights

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Property Rights

Real Property Definition

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Real Property Definition

Property Investment

Sun, 26 Feb 2012 23:05:04 +0000

Property Investment

Property Trust(s)

Sun, 26 Feb 2012 23:05:04 +0000

Property Trust(s)

Negotiating a Contract

Sun, 26 Feb 2012 23:05:04 +0000

Negotiating a Contract

Real Estate Negotiation

Sun, 26 Feb 2012 23:05:04 +0000

Real Estate Negotiation

Dont Let It Fall Through

Sun, 26 Feb 2012 23:05:04 +0000

Dont Let It Fall Through

Sell Your Home Fast

Sun, 26 Feb 2012 23:05:04 +0000

Sell Your Home Fast

Real Estate Tax Advice

Sun, 26 Feb 2012 23:05:04 +0000

Real Estate Tax Advice

Property Inspection

Sun, 26 Feb 2012 23:05:04 +0000

Property Inspection

Pick An Offer

Sun, 26 Feb 2012 23:05:04 +0000

Pick An Offer

Open House Expectations

Sun, 26 Feb 2012 23:05:04 +0000

Open House Expectations

Your Open House

Sun, 26 Feb 2012 23:05:04 +0000

Your Open House

Marketing Info

Sun, 26 Feb 2012 23:05:04 +0000

Marketing Info

Listing Real Estate

Sun, 26 Feb 2012 23:05:04 +0000

Listing Real Estate

Selling My Property

Sun, 26 Feb 2012 23:05:04 +0000

Selling My Property

Multiple Offers

Sun, 26 Feb 2012 23:05:04 +0000

Multiple Offers

Getting Real Estate Ready

Sun, 26 Feb 2012 23:05:04 +0000

Getting Real Estate Ready

Real Estate List Price

Sun, 26 Feb 2012 23:05:04 +0000

Real Estate List Price

Housing Market Info

Sun, 26 Feb 2012 23:05:04 +0000

Housing Market Info

Pricing Your Property

Sun, 26 Feb 2012 23:05:04 +0000

Pricing Your Property

Property Appraisal

Sun, 26 Feb 2012 23:05:04 +0000

Property Appraisal

Real Estate Appraisal Info

Sun, 26 Feb 2012 23:05:04 +0000

Real Estate Appraisal Info

More Tax Advice

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More Tax Advice

Real Estate Agent

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Real Estate Agent

Real Estate FSBO Advice

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Real Estate FSBO Advice

Real Estate Appraisal

Sun, 26 Feb 2012 23:05:04 +0000

You should look at each home for its individual characteristics. Generally, older homes may be in more established neighborhoods, offer more ambiance, and have lower property tax rates. People who buy older homes, however, shouldn't mind maintaining their home and making some repairs. Newer homes tend to use more modern architecture and systems, are usually easier to maintain, and may be more energy-efficient. People who buy new homes often don't want to worry initially about upkeep and repairs.

Only an appraiser can give a real home value, but one thing your Pasadena real estate agent can help you with, is determining the 'sold' value of homes around the area. This is especially important when writing an offer!

Real Estate Tax Shelter(s)

Sun, 26 Feb 2012 23:05:04 +0000

Real Estate Tax Shelter(s)

Real Estate Tax Benefits

Sun, 26 Feb 2012 23:05:04 +0000

Real Estate Tax Benefits

Loan Closing Advice

Sun, 26 Feb 2012 23:05:04 +0000

Loan Closing Advice

Escrow Advice

Sun, 26 Feb 2012 23:05:04 +0000

Escrow Advice

Home Loans

Sun, 26 Feb 2012 23:05:04 +0000

Home Loans

Closing Costs

Sun, 26 Feb 2012 23:05:04 +0000

Closing Costs

Review A Closing

Sun, 26 Feb 2012 23:05:04 +0000

Review A Closing

Closing a Home

Sun, 26 Feb 2012 23:05:04 +0000

Closing a Home

After The Loan

Sun, 26 Feb 2012 23:05:04 +0000

After The Loan

Credit History

Sun, 26 Feb 2012 23:05:04 +0000

Credit History

Negotiating Tips

Sun, 26 Feb 2012 23:05:04 +0000

Negotiating Tips

Property Negotiation

Sun, 26 Feb 2012 23:05:04 +0000

Property Negotiation

Safety Inspection

Sun, 26 Feb 2012 23:05:04 +0000

Safety Inspection

Home Inspector Worksheet

Sun, 26 Feb 2012 23:05:04 +0000

Home Inspector Worksheet

Home Insurance

Sun, 26 Feb 2012 23:05:04 +0000

Home Insurance

Home Inspection

Sun, 26 Feb 2012 23:05:04 +0000

Home Inspection

Debt To Income Ratio

Sun, 26 Feb 2012 23:05:04 +0000

Debt To Income Ratio

Your Loan

Sun, 26 Feb 2012 23:05:04 +0000

Your Loan

Apply for a Mortgage

Sun, 26 Feb 2012 23:05:04 +0000

Apply for a Mortgage

Select a Mortgage

Sun, 26 Feb 2012 23:05:04 +0000

Select a Mortgage

Mortgage Alternatives

Sun, 26 Feb 2012 23:05:04 +0000

Mortgage Alternatives

Basic Mortgage

Sun, 26 Feb 2012 23:05:04 +0000

Basic Mortgage

Mortgage Loan

Sun, 26 Feb 2012 23:05:04 +0000

Mortgage Loan

Effective Offer Writing

Sun, 26 Feb 2012 23:05:04 +0000

Effective Offer Writing

Mental Control

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Mental Control

Comparison Shopping

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Comparison Shopping

Home Selection

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Home Selection

Home Hunt

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Home Hunt

Approval Letters

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Approval Letters

Real Estate Ads

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Real Estate Ads

House Search

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House Search

Your Wish List

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Your Wish List

Find your Dream

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Find your Dream

A REALTOR Can Help

Sun, 26 Feb 2012 23:05:04 +0000

A REALTOR Can Help

Confidence and Experience

Sun, 26 Feb 2012 23:05:04 +0000

Confidence and Experience

Ownership Advice

Sun, 26 Feb 2012 23:05:04 +0000

Ownership Advice

Young Buyer

Sun, 26 Feb 2012 23:05:04 +0000

Young Buyer

Contract, Exclusive Right of Sale

Sun, 26 Feb 2012 23:05:04 +0000

Contract, Exclusive Right of Sale

Home Ownership: Are You Prepared?

Sun, 26 Feb 2012 23:05:04 +0000

Home Ownership: Are You Prepared?

Buying an Affordable Home

Sun, 26 Feb 2012 23:05:04 +0000

Buying an Affordable Home

Home Ownership : How To

Sun, 26 Feb 2012 23:05:04 +0000

Home Ownership : How To

Buy vs Rent

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Buy vs Rent

Checklist for Home Buyers

Sun, 26 Feb 2012 23:05:04 +0000

Checklist for Home Buyers

Buying and Selling Real Estate in Pasadena CA

Mortgage Funding Info

La Canada Flintridge Real Estate

Arcadia CA Real Estate

Credit Info

Fico Scores Effect Purchasing

Homes for Sale

Realtor

Property Rights

Real Property Definition

Property Investment

Property Trust(s)

Negotiating a Contract

Real Estate Negotiation

Dont Let It Fall Through

Sell Your Home Fast

Real Estate Tax Advice

Property Inspection

Pick An Offer

Open House Expectations

Your Open House

Marketing Info

Listing Real Estate

Selling My Property

Multiple Offers

Getting Real Estate Ready

Real Estate List Price

Housing Market Info

Pricing Your Property

Property Appraisal

Real Estate Appraisal Info

More Tax Advice

Real Estate Agent

Real Estate FSBO Advice

Real Estate Appraisal

Real Estate Tax Shelter(s)

Real Estate Tax Benefits

Loan Closing Advice

Escrow Advice

Home Loans

Closing Costs

Review A Closing

Closing a Home

After The Loan

Credit History

Negotiating Tips

Property Negotiation

Safety Inspection

Home Inspector Worksheet

Home Insurance

Home Inspection

Debt To Income Ratio

Your Loan

Apply for a Mortgage

Select a Mortgage

Mortgage Alternatives

Basic Mortgage

Mortgage Loan

Effective Offer Writing

Mental Control

Comparison Shopping

Home Selection

Home Hunt

Approval Letters

Real Estate Ads

House Search

Your Wish List

Find your Dream

A REALTOR Can Help

Confidence and Experience

Ownership Advice

Young Buyer

Contract, Exclusive Right of Sale

Home Ownership: Are You Prepared?

Buying an Affordable Home

Home Ownership : How To

Buy vs Rent

Checklist for Home Buyers