Nevada Arizona Mortgages - No Income Verificaton Mortgage Loan - Adjustable Rate Mortgages Las Vegas

Mortgage Programs

Home	Construction Loans	ARMs	Refinancing
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Arizona Nevada Mortgage Programs

Bruce Specter can provide you with hundreds of mortgage programs from simple single purchases to multi-person/unit transactions, you're sure to find the loan to fit your needs whether it be a fixed rate mortgage, an adjustable rate mortgage, a Interest Only Mortgage, an 100% mortgage, a Option ARM mortgage, a No Income Verification (NIV) loan, or a construction/lot loan!

Choosing the right loan for you requires that you review your financial objectives and be able to answer the following questions:

How long do I plan to stay in the home I am purchasing or refinancing?

How much money do I have available for the down payment and closing costs?

What is my tax bracket?

Is paying my mortgage off early important to me?

Can I or should I make extra principal payments on my mortgage?

Do I think interest rates will rise or fall in the near future?

Do I want my mortgage payment to be the same amount every month? or do I mind if my mortgage payment varies each month?

Should I finance my closing costs in the interest rate or the loan amount?

Is my income projected to at least remain the same or increase?

Your answers to these questions are important in your loan selection process and Bruce Specter can help you make informed decisions about your loan selection.

Basic Loan Programs

Fixed Rate Mortgages	100% Mortgage	No Income Verification (NIV) Loans
Adjustable Rate Mortgages	Option ARM Mortgages	Construction/Lot Loans
Interest Only Mortgages	Commercial Lending

Fixed Rate Mortgages

The most common fixed rate loans are the 15- and 30-year mortgages. In these types of mortgages, the interest rate and monthly payments remain constant over the life of the loan. The payments are calculated so that upon maturity (at the end of the 15 or 30 year term) the mortgage loan is paid in full. During the early amortization period of these fixed rate mortgages, a large percentage of the monthly payment is used for paying the interest. As the loan is paid down, more of the monthly payment is applied to principal. For fixed rate mortgages, you may be able to qualify for a ZERO down program. Some of the advantages of the fixed rate mortgage is that your mortgage payment is unaffected if interest rates in the market increase and also, your monthly payments remain constant, so you can more easily budget your finances.

Adjustable Rate Mortgages

An adjustable rate mortgage offers borrowers an interest rate that fluctuates over time. The initial interest rate is in effect for a specific period, usually 6 months to 1 year, and then the rate and payment adjust. The monthly payment adjusts at the same time the interest rate changes when ARMs are fully amortizing. Some ARMs may have an interest rate adjustment, but the monthly payment may not adjust; the difference or "shortfall" in interest may be added to the principal creating a negative amortizing loan. In essence, the principal balance on the loan increases rather than decreases unless additional payments are made.

Hybrid ARMs are also available, providing better interest rates than 30 year fixed rate mortgages, as well as short term stability. Examples of Hybrid ARMs are 3/1, 5/1 & 7/1 ARMs. The first number (3,5,7) tells you how long a period, in years, the rate is fixed for. (Example, a 3/1 ARM's interest rate is fixed for 3 years, After that period, it converts to a 1 year ARM, and is subject to yearly adjustment based on the treasury bill index). There can be a big difference in rate between a fixed and hybrid mortgage (up to 2%+). Keep in mind that the national average for refinancing or selling a home is every 7 years (5 years in Arizona).

Click here for more information about ARMs.

Interest Only Mortgages

The loan product commonly called 'Interest Only Mortgage' is an interest-only payment option which is offered on fixed rate (FRM) or adjustable rate (ARM) mortgages or on option ARMs. The option to pay 'interest-only' lets you pay only the interest portion of your monthly payment for a fixed period (three, five, seven or ten years). At the end of that period your loan becomes fully amortized, thus resulting in greatly increased monthly payments. Your new payment will be larger than it would have been if it had been fully amortizing from the beginning. The longer the interest only period, the larger the new payment will be when the interest only period ends.

Example

If a 30-year fixed rate loan of $350,000 at 7% has interest only payments for 5 years, the payment during the interest only period is $2,625.00. Starting in month 61, the payment is $3,180.51. The fully amortizing payment (the payment that, if maintained over the term of the loan, will pay it off completely) would be $2,993.86. So in order to reduce your payment by $368.86 for the first 5 years, you pay an additional $186.65 for the next 25 years.

Interest only payment plans are for borrowers who expect to earn a lot more in a few years and want to maximize their buying power now or who will invest the difference between an interest only and an amortizing mortgage payments, and who are confident that these investments will make money.

Advantages

+ During the interest only term your monthly payments are as low as they can possibly get;
+ You can qualify for a larger loan amount, maybe even a larger home;
+ During the interest only term you won't pay out cash to build equity;
+ Make investments with payment difference to potentially build your net worth;
+ The entire monthly payment qualifies as tax-deductible interest during the interest only period.

ARMs with Interest-Only Payments

Interest only payment options are typically offered on adjustable rate mortgages.

Payments made during the initial interest only period are based on the interest rate and loan balance and are applied towards interest only (they will not reduce the principle balance of your loan). Please note that the initial interest rate for the loan is established by your lender based on market conditions and may be lower than, or higher than the rate that is based on the index used to make rate adjustments.

After the initial interest only period the loan converts to a traditional ARM: monthly payments are based on the interest rate, loan balance and remaining loan term and are applied towards principle and interest. The interest rate will be adjusted periodically based on the index rate plus a margin (your rate will be equal to the index rate plus the margin, rounded to the nearest one-eighth of one percentage point, unless your interest rate cap limits the amount of change in the interest rate).

100% Mortgages

The main advantage of this type of loan, also known as 100% Financing, is the ability to buy a home with almost no money down. If you have a strong credit profile but have limited funds to commit to a downpayment, then 80/20 mortgage is just right for you.

Lenders typically require a downpayment of at least 20 percent of the purchase price. If the loan amount is for more than 80 percent of the purchase price, private mortgage insurance (or PMI) is usually required. You can avoid paying PMI by getting a second mortgage ('piggyback loan') to back up your first mortgage.

The first mortgage is provided for 80 percent of the cost of the home and the 'piggyback' second mortgage is for the remaining 20 percent. The 80 percent first mortgage can be a fixed-rate (15-year or 30-year), adjustable-rate (usually 5/1, 7/1 or 10/1 fixed period ARM) or interest-only loan. The 20 percent second mortgage can be a home equity line of credit that changes with the prime rate.

Combined, the two loans allow you to purchase 100% of your home with no money down.

Option ARM Mortgages

This loan program is an adjustable rate mortgage with added flexibility of making one of several possible payments on your mortgage every month, in order to better manage your monthly cash flow.

It's low introductory start rate allows you to make very low initial mortgage payments and low qualifying rates enable you to qualify for more home.

The minimum payment option can help keep your monthly payments affordable. If the minimum monthly payment is not sufficient to pay the monthly interest due, you can always avoid deferred interest by choosing the interest-only payment option.

With the Option ARM, you generally have at least two fully amortized payment choices, leading to a quicker loan payoff. If you prefer to pay off your loan on schedule, you can make the fully amortized payment based on a 30-year loan, or you can choose the 15-year payment option for the fastest equity build-up.

In most cases, you can also make additional principal payments which reduce the amount you need to pay in later months.

Option ARM loan programs are right for you if you'd like to own your property only for a short time, and prefer affordability and flexibility in your monthly payment. However, if you select the minimum payment option in the early years, you should be prepared for a possible sudden increase (often referred to as payment shock) in your monthly payments thereafter.

Option ARM loans have four major types of payment options:

Minimum Payment

With the minimum payment option, your monthly payment is set for 12 months at your initial interest rate. After that, the payment changes annually, and a payment cap limits how much it can increase or decrease each year.

If you make the minimum payment after the end of your initial interest rate period, which usually holds only for the first 1 to 3 months, it may not be enough to pay all of the interest charged on your loan for the previous month and the unpaid interest will be added to the principal balance you owe (will be deferred).
Interest-Only Payment

With the interest-only payment option, you can avoid deferred interest, when the minimum payment is not enough to pay the monthly interest due. The interest-only payment option, however, is not available if the interest-only payment would be less than the minimum payment. Please note, that this payment option does not result in your principal reduction.

The interest-only payment may change every month based on changes in the ARM index used to determine your fully indexed rate.
Fully Amortizing 30-Year Payment

With fully amortizing payments, you pay both principal and interest and keep your loan on schedule. Your payment is calculated each month based on the prior month's fully indexed rate, loan balance and remaining loan term.
Fully Amortizing 15-Year Payment

If you prefer to put your loan on an accelerated schedule and can afford higher monthly payments, the 15-year payment option allows you to repay your loan twice as faster and save more than half the total interest costs of a 30-year loan.

Please note, that this payment option is offered only on the 30-year (or 40-year) term. It will cease to be an option when the loan has been paid to its 16th year.

These options should be clearly marked on your loan statement, so it is very easy to figure out how much you should pay each month. Just enter the correct amount in the payment coupon section of your statement.

Option ARM loan programs are becoming more and more popular today, and there are many variations of this innovative home financing product on the market: PayOption ARM, CashFlow Option Loan, 1-Month Option ARM, Flex 5 Home Loan, Pick-a-Payment^sm Loan, 12 MAT ARM, Option Power ARM, FlexPay� 12 MAT, FlexPay� 3/1 LIBOR ARM, OptPAY ARM, etc. If you are thinking about applying for an option ARM, it is important to shop carefully and investigate several loan products, to find the one best for you.

Option ARM loan programs may vary in the initial rate, negative amortization and lifetime caps, ARM index, or optional features, however, when comparing one option ARM with another, pay close attention to the margin and the fully indexed rate. Keep in mind that the initial interest rate holds only for the 1st month.

What features to compare with different Option ARM loans?

Loan Term

Option ARM loans are available for 30 or 15 years. *

Initial Interest Rate (Note Rate)

Your Minimum Payment Rate or 'Start Rate'. It may vary from 1.25% up to 3.95% and depends on your Loan-to-Value Ratio (LTV).

With hybrid option ARMs, that use a different minimum payment calculation method, your initial rate is usually higher.

Initial Interest Rate Period (Introductory Period, Initial Fixed-Rate Period)

Option ARM loans are available with an initial introductory period, usually of 1, 3 or 6 months, after which the interest rate may change.

Notes:

Some option ARM are currently offered without any introductory period, so the fully indexed rate (FIR) is effective immediately.

The initial Fixed-Rate Period should not be confused with Initial Fixed-Rate / Fixed-Payment Period, a typical feature of hybrid option ARMs.

Examples:

With 1-month option ARMs that have a 1-month introductory period, the first interest rate change occurs when the 1st monthly payment is due. Thereafter, the interest rate may change monthly.

If you have a 1-month option ARM loan with a 3-month introductory period, the first interest rate change occurs when the 3rd monthly payment is due. Subsequent interest rate changes may occur each month thereafter.

During the introductory period: After the introductory period:

Monthly Payment = Minimum Payment

Interest Rate = Start Rate

Monthly Payment = Minimum Payment

or Interest-Only Payment

or Fully Amortizing 30-Year

or Fully Amortizing 15-Year

Interest Rate = Fully Indexed Rate

Periodic adjustments after the introductory period:

Event Loan Feature Change Frequency Cap

Monthly Interest Rate Adjustment Fully Indexed Rate Monthly Lifetime Cap

Annual Minimum Payment Change Minimum Payment Annually Payment Change Cap

Loan Recast Minimum Payment Every 5th Year None

Other adjustments:

Event Loan Feature Change Frequency Cap

Loan Recast (negative amortization limit is reached) Minimum Payment Irregularly None

Fully Indexed Rate (FIR)

The sum of the margin and the most recent index figure available prior to a scheduled interest rate change date. Subject to the interest rate caps.

Note: Your interest rate can be equal to the index rate plus the margin exactly, or it can be rounded to the nearest one-eighth of one percentage point (.125%).
Example:
Index: 4.883 (MTA as of November 2006)
Margin: 2.75%
Fully Indexed Rate ('as it is'): 7.633% ( = index + margin )
Fully Indexed Rate (rounded to the nearest 0.125%): 7.625%

Interest Rate Adjustment Period

The time between interest rate adjustment dates.

With option ARMs, the adjustment period is usually set to 1 month: the fully indexed rate may not change more than once every month based on the movement of the index.

Maximum Rate (Interest Rate Ceiling)

See: Lifetime Cap.

Lifetime Cap

A lifetime cap limits the interest rate increase over the life of the loan. It protects you financially and usually is expressed as maximum rate. Lifetime caps may vary from 9%-10% up to 19%.

Lifetime Floor (Life Floor, Lifetime Rate Floor)

The lifetime floor is never lower than the margin. See: Margin.

Minimum Payment

Initially (for the first 12 months), the minimum payment is calculated using the start rate, the amount you borrow and the loan term. Thereafter, it is recalculated annually.

Example:
Loan Amount: $400,000.00
Initial Rate: 1.25%
Index: 4.326 (MTA as of February 2008)
Margin: 2.75%
Payment Cap: 7.5%
Fully Indexed Rate: 7.076% ( = index + margin )

Possible Minimum Payment Changes (based on a 30-year loan term)
Year 1	$1,333.01	= Base of Minimum Payment
Year 2	$1,432.99	= $1,333.01 + 7.50%
Year 3	$1,540.46	= $1,432.99 + 7.50%
Year 4	$1,655.99	= $1,540.46 + 7.50%
Year 5	$1,780.19	= $1,655.99 + 7.50%

Minimum Payment Adjustment Period

The minimum payment adjustment period is usually set to 12 months, unless negative amortization limit is reached.

Minimum Payment Change Cap

A limit on how much the minimum monthly payment can change at each adjustment. With most option ARMs, your payment cap will be 7.5% of minimum payment amount in first five years. It means that on any Payment Change Date, the minimum payment cannot increase or decrease by more than 7.50% (unless the loan is
recast or the negative amortization limit is reached).

Note: With some loans, the minimum payment is subject to a 7.5% increase with no limit on the decrease (in a declining interest rates environment).

Negative Amortization Cap (Balance Cap, Negative Amortization Limit, Negative Amortization Ceiling)

It limits the loss of equity in your home when low monthly payments do not cover fully the interest rate charges agreed upon in the mortgage contract and is usually set to 110% - 125% of your original principal balance.

When the negative amortization limit is reached, the minimum payment increases immediately: the payment required to fully amortize the loan over the remaining term becomes the new minimum payment, and the payment cap does not apply.

Payment Recast Period

Recasting (or re-calculating your loan) is another way of limiting negative amortization and keeping your loan on the original schedule. The main purpose of recasting is ensure the loan is paid off within the scheduled amortization period.

Option ARM loans are usually recast every five or ten years (or sooner, if the negative amortization limit is reached). This re-calculation (or re-amortization) is based on the outstanding principal balance, the remaining term and the fully indexed rate.

When the loan is recast, the payment required to fully amortize the loan over the remaining term becomes the new minimum payment, and the payment cap does not apply (the payment cup, however, will go back into effect immediately after the recast, and will hold until the next time your loan is recast).

Standard 5-Year (10-Year) Recast vs. Negative Amortization Limit Recast

The 1st Standard 5-Year Recast occurs when the 61st payment is due.

Subsequent Standard 5-Year Recasts occur each 60 months thereafter.

A new minimum payment is calculated for the payment due on the 61st month based on the fully indexed rate at that time, the remaining term of the loan and the loan balance at that time. There are no other payment options for this (61st) month. This new recast payment becomes the new minimum payment for the upcoming 12 months subject to a 7.5% (or whatever your payment cap is) increase the following 12 months and subject to a full recast 5 years from this payment recast, i.e. when the 121st payment is due.

The 1st Negative Amortization Limit Recast occurs when (or if) the negative amortization cap is reached. The loan is automatically recast for the remaining portion of the standard recast term (5 years) and then subject to recast at the normal scheduled (5 year) recast period.

For example, if the loan reaches the negative amortization cap on month 59, the loan goes through a Negative Amortization Limit Recast. At the end of the 5th year, on the 61st month, the loan goes through a scheduled Standard 5-Year Recast.

Index Options

Your interest rate is usually based on one of the following indexes:

Monthly Treasury Average (MTA)

Cost of Savings Index (COSI)

London InterBank Offered Rate (LIBOR)

11th District Cost Of Funds Index (COFI)

These indexes change once a month.

Historical performance of the four most popular option ARM indexes over the last 14 years.

Generally, lenders use the most recent Index figure available as of the date 15 days before each interest rate adjustment date. This Index value is called the 'Current Index'.

Margin

The number of percentage points (for example, 2.75) the lender adds to the index rate to calculate the ARM interest rate at each adjustment. The margin is set in the mortgage contract, remains fixed for the term of the loan and is not impacted by the financial markets and movement of interest rates.

Caps

Option ARMs don't have First Interest Change Cap or Periodic Interest Change Cap*. Initial and periodic interest rate changes are not capped and move with the market, as long as the rate adjustments do not exceed the lifetime cap. The interest rate cannot adjust lower than the lifetime floor.

Option ARM loans have:

Lifetime Cap (or Maximum Rate)

Lifetime Floor (or Margin)

Payment Cap (or Minimum Payment Change Cap)

Balance Cap (or Negative Amortization Limit)

* This is not the case with so-called hybrid (combined) option ARMs. Hybrid option ARM loan programs usually have both First Interest Change Cap and Periodic Interest Change Cap, however, their minimum payment adjustments are not capped (i.e. there is no Payment Cap). Both hybrid and standard option ARMs have Balance Cap (a. k. a. Negative Amortization Limit).

Documentation Types

Full doc, Limited doc, Low doc, Stated Income, No Income\No Asset (NINA), Stated Income\Stated Assets (SISA). Read more about Loan Documentation Requirements. Click here for a list of documents most lenders will require in order to process your mortgage application.

Loan Program Variations / Options / Special Features

Initial Fixed Rate Period

Option ARM loans may have an initial fixed rate period between the time the loan is originated and the first interest rate change date. After the initial fixed period the loan usually converts to a monthly-adjustable option ARM. Hybrid Option ARM loan programs have either an initial fixed payment period or an initial fixed rate / fixed minimum payment period of 3 to 7 years.

40-Year Term

Some option ARM loans, for a fee (or for an increase in your rate), contain a provision permitting you to increase the term of the loan from 30 to 40 years.

Bi-Weekly Payments

Some lenders offer optional bi-weekly payment plans with option ARMs. With bi-weekly mortgage plan you pay half of the monthly mortgage payment every 2 weeks. It allows you to repay a loan much faster. For example, a 30 year loan can be paid off within 18 to 19 years.

Conversion Option

The interest rate or points may be somewhat higher for a convertible option ARM, and it also may require a small fee at the time of conversion.

Commercial Lending

Commercial Mortgages and Commercial Property

What you should know

3 Reasons Why Commercial Properties Are A Better Investment Than Residential Properties

Commercial properties should be the cornerstone of your investment portfolio. When investors were leaving the stock market in droves, they turned to investing in real estate. And real estate is an excellent choice compared to stocks. The tax deductions and potential for price apreciation are enough reasons for burned out stock market investors to make the switch.

But real estate is a wide open field, where should you focus your time and money?

Many people might believe that residential property investing is the best way to go. Just look at all the television programs that are now on the air, such as "Flip This House" on A&E and "Property Ladder" on TLC. They focus on buying residential properties as investments. But I think the better solution is investing in commercial properties. Here are 3 reasons why...

#1 No More Qualifying For Loans

With commercial properties, the properties qualify the loan...not the borrower. Lenders concentrate primarily on the income produced by the property to determine the financing risks. So with a few financial calculations, you can determine if the property will qualify the loan amount requested.

#2 No More Personally Guaranteeing Loans

There is a term that is never heard of in residential financing...non-recourse. Non-recourse financing is a type of debt in which the borrower is not personally liable. If you default on a non-recourse loan, the lender must recover the amount you owe by foreclosing on the property by which the loan is secured. This won't affect your personal credit score.

#3 Deal With Professional Tenants

Investing in residential property, you will eventually find yourself in the world of tenant hell. Where excuses and non-payment go hand in hand. And government entitlement programs, such as Section 8 can cause you to lose your mind with bureacracy.

But with commercial property tenants, you will find them to be more professional. They are in a business and treat their leases as such. With these leases, they can be long term (5, 10, 15 years) and the they can be written so that the tenant pays for maintenance, taxes and insurance.

Most investors want to invest in commercial properties but let the fear of the unknown stop them. But with proper training and education, buying them is not that difficult.

Commercial Properties...Before You Buy

I get asked this question frequently,

What should I do before I buy any commercial properties?�

Well, there are 3 items you should do BEFORE you buy that first commercial property.

#1 Show Me The Money

Many investors watch those late night infomercials and dream about buying properties with no money down. They want to make zillions of dollars in just 30 days!

Let�s dig deeper than the hype and take a look at what is practical.

Yes, you can get creative with the financing, like seller carry backs or 100% LTV financing. But that doesn�t mean you shouldn�t have ANY money. You should have enough discretionary money set aside specifically for investing. This can be in the form of savings accounts, stocks/mutual funds or credit cards (be careful with the credit cards and only use them as a last resort!).

Even if you are able to get 100% financing, you will still have to pay for some pre-closing & closing fees. Some of these fees include appraisals, environmental reports, credit reports, document preparation, loan origination, etc. You will also need to have money in reserve to take care of any maintenance issues, legal issues and so on.

How much money should you have?

Well for pre-closing & closing costs, you should budget 3% � 5% of the loan amount. You might not need all that you have budgeted�a lot depends on the lender and their requirements. But it is wise to have the money set aside just in case.

As far as money needed for reserves once you have the property, depends on the condition of the property. Will the property need any big ticket items in the near future, like HVAC or roof? Will the parking lot need to be re-paved? This is information you will obtain during the due diligence phase of buying the commercial property. As a rule of thumb, budget at least 1% of the property value as reserves. Also, some lenders will require that a portion of the monthly income from the property be maintained in an account for these types of maintenance issues.

Where Can You Get The Money?

Well one overlooked source for real estate investors is real estate notes! Do you currently hold a mortgage note? Then why not sell it? There are nationwide mortgage note buyers available to help you.

Educate yourself about other investment opportunities through these investment guides.

#2 Protect Yourself!

No I don�t mean weapons�I mean legally! We live in a very litigious society, where anybody can get sued over anything. Protect yourself; don�t own investment commercial property in your own name. Use a legal entity like LLC or corporations to protect yourself. And forming LLC's has never been easier! Remember it is not if you get sued�it is when you get sued, are you prepared?

#3 Have A Good Team

You should begin assembling your team now. Ask for recommendations from other investors or network at your local Real Estate Investment Associations (REIA�s). Who should be on your team?

Commercial Mortgage Broker
Attorney that specializes in real estate
Accountant that specializes in real estate
Commercial Property Realtor
Insurance agent/broker
Property Management Company, if you will need it

You should interview them and make sure that you can work with them. Don�t wait for a crisis before you have your team in place, start now.

Commercial Loan Purpose...What Are You Going To Do With The Money?

Can you explain to a lender or a broker your commercial loan purpose? This is the first thing a lender wants to know when you request a loan and you need to be able to communicate it to them. So, why do you need the money?

Acquisition or Purchase
Is the conveyance of title to you (or your entity) of an existing building or raw land.

Usually for a purchase, a lender will loan 80% - 90% of the current appraised value of the property. This percentage will vary depending on property type and income from the property.

Refinance
A current mortgage note is being paid off and a new mortgage note is being created. A refinance is usually done to get better terms or pull out cash from the value of a property.

Usually for a refinance, a lender will loan 80% - 90% of the current appraised value of the property. This percentage will vary depending on property type and income from the property. Of that percentage, the lender will pay off the current mortgage note and the remaining amount of the loan to the borrower.

Construction
This is for the building of, renovation of, or rehabilitation of real estate. Generally, these loans are based on the value of the property �as completed�. Be sure to understand if your lender is lending on Loan to Cost or on Loan to Value as Completed.

How To Find Commercial Properties To Buy

So how do you find commercial properties that fit into your investment criteria? It can be challenging and it may take a while but it is definitely worth it.

Before you start your commercial property search, you should know: what type of property, what rate of return (cap rate), and how much money you want to spend.

And before you start looking for properties all across the U.S., I would suggest that you concentrate in your local market until you have enough experience to venture out.

So you have all of those questions answered, so lets take a look at different sources for finding properties.

Commercial Realtors

I would say that your best bet is to find a good commercial realtor to help you in your search. Not only can a good realtor locate the properties but they can also provide assistance with your due diligence (notice I didn't say "do" your due diligence). Also, the seller of the property will usually have a realtor, so it is in your best interest to have someone representing you. By the way, it is usually the seller that pays the commission, so you won't have any expenses with the realtor.

If you've done your homework and know exactly what you want, you shouldn't have any problem finding a realtor to work with you. I would interview at least 3 agents to make sure that it is a good match between you. A good realtor will find commercial properties that you have outlined, as far as type and price. On the other hand, don't waste their time either. They get paid at closing, so don't have an agent spend a year finding properties for you and you can't make a decision or if you're scared to make that leap. Nobody likes to work for free, so be aware of that.

To find a commercial realtor, you can go online to the National Association of Realtors. You can also ask for recommendations from other investors or check out your local newspaper.

So...for whatever reason, you've decided not to use the services of a realtor. What other ways can you find commercial properties?

Internet

The internet has exploded with different websites to help you find commercial properties. The most popular is loopnet. They offer free & paid viewing sources. If you are a serious investor, then pay the monthly fee to get the best properties. Also there is a website called Costar. This site is geared towards commercial realtors but it offers excellent products.

Of course, there are other real estate forums and user groups where you can find commercial property for sale. The only down side to the internet search, is that it is very limited when you are searching for local properties. For local properties, try Craigslist.

Networking

An often overlooked method for finding commercial properties is through networking. You can go to your local real estate investment group and post a flyer indicating that you are looking for commercial properties. You can try this also at Chamber of Commerce meetings. Try to find an area group of building owners , shopping center , or apartment owners. Usually within these associations, you will find owners that are selling their properties.

The above methods will offer you the best opportunity to find commercial properties. However, you can also try the classifieds in your local newspaper or thrifty paper. You can also drive around and look for "For Sale" signs. They might not be the quickest way to find a commercial property but it can't hurt.

What Is In A Lender LOI?

A Lender LOI or also a Letter of Interest is a document that a Commercial Mortgage Broker or Lender will provide to you when you submit a loan package. This document will state the terms of the proposed loan that the lender will give you.

The lenders LOI is based on the information you provide. So the more information you provide, the more accurate the loan quote will be. Too many times I�ve seen a lender quote a good rate with good terms, then turn around and not be able to provide those terms. Why? Because during the due diligence phase, the lender finds out the borrower did not provide accurate or all of the information. Remember, lenders are in a business and their business is based on known risk. A lender won�t be in business too long if they keep lending out bad loans!

So what kind of information should you expect to see in a Lender LOI?

Well, it should have the brokers or lenders name and contact information. Also the Lender LOI should include the following information.

Loan Name

This is usually the property name or address. For this illustration we will use the name Ryan Office.

Loan amount

There is a requested loan amount and the loan amount the lender is going to lend. They will be listed on separate lines and the numbers may be different.

Quotation date & expiration date

The lender will only give you a specified amount of time to review their loan quote.

Loan terms

This is usually listed in years or months.

Amortization

This is usually listed in years or months.

Interest Rate Spread

This is a percentage over the current index yield.

Current Index Yield

The index yield on a given day.

Final Note Rate

This is the interest rate you will pay. It is the interest rate spread plus the current index yield.

Interest Rate Index

This is the index that is used in determining the current index yield. Examples are 10 yr Treasury, Prime or LIBOR.

Loan Type

This is stated as either fixed or variable loan.

Interest Accrual Method

This is how the lender will calculate your amount of interest.

Proposed DSCR

This is debt service coverage ratio for your loan amount.

Proposed LTV

This is the loan to value that the lender is willing to loan to you. This determines how much money you need to put down.

Prepayment

For paying off your loan early, some lenders charge a fee or penalty. That should be outlined in the lender�s quote.

Recourse Options

The loan will either be full recourse, partial recourse or non-recourse. Recourse determines if you are personally liable for any loan default.

Assumption & Assumption Fee

With most commercial loans, the loans are assumable for a new borrower for a small fee.

Junior Debt

Whether the lender will allow a 2nd to be taken on the property.

The lender will also state what conditions must be met for the loan. Examples are clear title reports, inspection, occupancy, etc. Also, the lender will give an estimate of the fees (due on acceptance of loan and at closing).

Sample Lender LOI
Loan Name	Ryan St Office Building
Requested Loan Amount	$800,000
Quotation Date	April 1, 2006
Expiration Date	April 15,2006
Loan Amount	$800,000
Loan Terms	10 years
Amortization	25 years
Interest Rate Spread	1.250
Current Index Yield	5.000
Final Note Rate	6.250
Interest Rate Index	10 year Treasury
Loan Type	Fixed
Interest Accrual Method	Actual 360
Proposed DSCR	1.53
Proposed LTV	67%
Prepayment Lockout Period	48 months
Prepayment Privilege	Yield Maintenance
Recourse Options	Non-recourse
Junior Debt	Prohibited
Assumption	Permitted
Assumption Fee	1%

Types Of Commercial Lenders

There are different types of commercial lenders that will loan you money for your projects. The type of lender you use will be dependent on several factors: property type, LTV�s, amortization, recourse, interest rates, time to close and other factors.

Lets take a look at the major commercial lenders in the market.

Conduit Lenders

These CMBS (Commercial Mortgage Backed Securities) are long term, fixed rate financing that is typically permanent and non-recourse.

Portfolio Lenders
Banks or Savings & Loans

They have shorter terms (3-5 yrs) with fixed or variable rates. Usually they are for permanent and construction financing and they are full recourse.

Credit companies

They offer long or short term with fixed or variable rate financing. As well as permanent and construction.

Life Companies

These commercial lenders are institutional quality with long term, fixed rate financing. Typically the loans are permanent and non-recourse.

Government Sponsored Enterprise (GSE)

Fannie Mae/DUS and Freddie Mac

Fannie Mae and Freddie Mac are purchases loans from commercial lenders. The rates on 5+ multifamily apartments are comparable to CMBS loans, but they are properties that would not otherwise qualify.

FHA HUD 223(f)

FHA loans are backed by the U.S. government. They offer higher LTVs and better terms & rates on 5+ unit multifamily apartments for properties that would not otherwise qualify.

Small Business Administration (SBA)

Backed by the U.S. government, these are loans for 51%+ owner occupied properties.

Non-Bank Lenders

These types of loans are also known as Stated Income, Low or No doc, private and hard money. These loans are more flexible with fast closings (great if you�re in a pinch for financing). But they also tend to have higher interest rates and back end or participation fees.

According to the Mortgage Bankers Association of America, about 20% of commercial mortgage loans done in the U.S. are with conduits, 20% are done with commercial banks, 20% done with life insurance companies, 13% with Fannie Mae and 8% with FHA. The top commercial/multifamily originators in 2005 were:

Wachovia for commercial bank/savings institutions and Conduits
Capmark Financial Group for Freddie Mac and FHA/Ginnie Mae
MetLife for life insurance companies
Deutsche Bank Berkshire for Fannie Mae
TIAA-CREF for pension funds
Cohen Financial for credit companies
Key Bank for REITS, mortgage REITs, investment funds and for other investors
Tremont Realty Capital, LLC for specialty finance companies

In general, there are basically two types of commercial lenders in the market: those that hold the loan on their balance (portfolio lenders) and those that sell the loan into the secondary market (conduit lenders). The secondary market represents Wall Street funds, also known as Commercial Mortgage Backed Securities (CMBS).

A portfolio lender makes their profits from the spread or margin above the interest rate index. A conduit lender makes their profits based on the difference from what they can sell the bond for on Wall Street and the value of the sum of all of the loans in the pool. That is the main reason why conduit lenders are able to price a commercial mortgage loan more aggressively than a portfolio lender.

So which lender is the best for you?

Well�it depends. It really depends on your project and investment strategy. So ask yourself some questions:

Is this a development project or is it fully developed?
What are your short term and long term plans for the property?
What are your needs in regards to interest rate?
As you build equity, will you want to refinance?

Portfolio loans have fixed-rate structures, such as fully amortizing loans, with no calls or balloons tied to a long-term, historically, stable index. Portfolio loans can better meet the needs of rehab or development projects.

Conduit loans are good for properties that are stable with good tenants (such as NNN properties). They offer low, fixed rates with long amortization and are non-recourse. While both portfolio and conduit lenders may have a lock-out period and yield maintenance, conduit loans also have defeasance issues if the loan is refinanced. This is because if the loan is refinanced, you are pulling the loan out of the pool of loans that backs the bond, thus changing the risk structure of bond. As such, the borrower has to pay to have another bond with similar risk, yield, duration, payment priority put in place of their loan. Conduits also don�t allow for secondary financing and have high pre-payment penalties. Conduit lenders are not known for moving quickly�typically taking 4 to 6 months to close.

Generally, regardless of the loan size, the fees for doing the loan (3rd party and closing costs) are the same for conduit and portfolio lenders.

Because there are so many different factors when looking for a commercial lender, it really pays to have a good commercial mortgage broker on your team, that can provide the know-how in getting the best lender for you.

Commercial Property Types...Which One Is The Best?

What commercial property types should you buy? You should consider the pros & cons of each property type, as well as, have a good understanding of your investment objectives and your experience. These factors will help lead you to your ideal commercial property.

Listed below are the most common commercial property types.

Apartments/Multi-family
Apartments or multi-family buildings are usually the first choice for new commercial investors. Apartment management and financing is very similar to residential, and so new investors feel more comfortable with them. The main disadvantage with apartments, is that they are management intensive.

In order for an apartment to be considered commercial property, it must have 5 or more units. There are numerous sub-types of apartments:

Low-Rise Garden Apartments
Mid-Rise Apartments
High-Rise Apartments
Student Housing
Military Housing
Townhouse Style
Co-op

When you are looking at properties to purchase, pay close attention to the location and general market for that area. You will want to avoid properties that are located in economically depressed or seasonal areas. Also, the property should have acceptable aesthetic qualities to be competitive with market standards and have a minimum occupancy of at least 85%.

What if the property you are evaluating has inferior physical characteristics or is in an economically depressed area?

You may have a higher interest rate, higher reserves and tighter underwriting constraints.

Mobile Home Parks
Mobile homes can be a wonderful investment, especially if you own the land and sell off the mobile home. You're just renting dirt at that point! If you're not familiar with mobile home investing, you need to read "Deals On Wheels: How To Buy, Sell And Finance Used Mobile Homes For Big Profit And Cash Flow" by Lonnie Scruggs. This book is a gem! Lonnie explains how to buy and sell mobile homes on a note. His presentation is very basic and understandable.

Now back to mobile home parks. Mobile Home parks are rated as 1 Star, 2 Star, 3 Star, 4 Star, and 5 Star. The Star ranking is based on the conditions and amenities of the park.

A 3 Star park usually has a mix of single and double wide homes that are in good condition. The park is attractive and offers some amenities.
A 4 Star mobile home park usually only has double wide homes that are skirted and in good condition. The homes will have concrete patios or raised porches.
A 5 Star mobile home park can be characterized as having deluxe accommodations, with a wide range of amenities and services. The homes are usually set back from the curb with paved streets, sidewalks, street lights and signs. The park is located in a desirable neighborhood and accessible to retail and community services. The homes are late model doublewides and modular homes in excellent condition.

The mobile home park should have at least 85% occupancy and be located in desirable areas. Also, be cautious if the park has too many homes for sale (more than 20% of total pads) or more than 20% of total pads are rented homes owned by the park.

Retail
Retail properties are properties that are occupied by one or more tenants and the property is utilized for retail purposes.

A free standing retail, strip center with an anchor tenant is a well known commercial retail business such as a national chain store or regional department store strategically placed in a shopping center so as to generate the most amount of customers for all of the stores located in the shopping center.

An Unanchored retail center is a center which is occupied by multiple tenants of which none are anchor tenants.

Single tenant investment grade retail properties are properties that are net leased to one investment grade tenant (BBB- rating or higher).

Office
The different categories of offices include:

Suburban Garden Office
Suburban High Rise Office
Medical Office
Central Business District (CBD) Office

Potential office buildings should have a minimum of 85% occupancy and is located on or near a main thoroughfare and easily accessible. Properties that have more than 20% of total revenue from owner occupied or owner affiliated tenants, will usually have a higher interest rate on any loans.

Mixed-Use
These properties will be a combination of any of the above property types. A real estate development of mixed use properties, should be complementary to each other.

Healthcare
These property types are nursing homes, congregate care and assisted living centers. Properties should be close to retail and community services. Be cautious of properties in economically depressed or seasonal areas. Also, be sure that the property complies with ADA requirements.

Hotel
Hotels are characterized as either Full Service or Limited Service.

Full Service Hotels can be further divided into Luxury, Upscale, Mid-scale, and Extended Stay hotels.

Limited Service Hotels can be further divided into Mid-scale, Economy, Budget and Extended Stay. When considering hotel properties, the property should have a stable operational history. A property with a history of four or less years should be scrutinized. The minimum acceptable occupancy is usually 60%. Lenders also prefer franchise affiliated hotels with franchise agreements extending beyond the term of the proposed loan.

Industrial
These property types will have usage for industrial purposes only. Such as

Warehouse-single tenant

Warehouse-multi tenant

Manufacturing

Research & Development

Flex Space

Light Industrial

Heavy Industrial

Self Storage
Also is called Mini-Storage, it is used for personal storage for lease by consumers.

Other Specialty
These property types are unique and the financing them can be difficult. They include gas stations, oil change facilities, etc.

A Good Commercial Mortgage Broker Should Be The 1st Person On Your Team

Why do you need a Commercial Mortgage Broker?

Do you want the best rates on your loans? Do you want help in structuring your deal?

Then you need to have a Commercial Mortgage Broker on your team. And not just any mortgage broker�but a GOOD one!

While it is true that you can contact your local banker friend, you know the one that you play golf with on the weekends, and get a commercial mortgage. But what you might not know is that a good Commercial Mortgage Broker can obtain more attractive and more suitable financing (e.g., long term, fixed rate financing), at a more competitive rate.

What makes a Good Commercial Mortgage Broker?

A good Commercial Mortgage Broker should be experienced, but more importantly, should understand your needs, be able to perform risk analyses and should have a strong knowledge of the underwriting process. This will ensure that the Commercial Mortgage Broker can advise you wisely and offer you several financing options.

What is the process for working with a Commercial Mortgage Broker?

Before you even look for your property, you should have interviewed and identified the Commercial Mortgage Broker that you want to work with. This broker understands commercial finance (be careful not to pick a residential mortgage broker�underwriting guidelines are completely different for commercial properties) and is responsive to you.

After you have located your property, you are now at the point where you need the services of your broker. What information will your broker need in order to get a firm LOI or rate quote?

Property operating statements and/or tax returns.
A current rent roll and copies or abstracts of the leases.
Enough information to create a brief executive summary describing the loan request.
Digital images of the property.
A signed fee agreement between you and the broker (more about fees below)

Your broker may need additional information prior to closing but this is enough to submit to the lenders. At this point your broker should ask you questions regarding your desires for your loan request, such as term, amortization, etc.

Why do you need a fee agreement?

A signed fee agreement protects both you and the broker. You don�t want to get to the closing table and find out you owe your broker more than you thought. Likewise, your broker doesn�t want to spend a lot of time analyzing and securing lenders for your project, then to have you go to another broker or lender.

This fee agreement is between you, the borrower, and the Broker and most lenders want to have a copy before they issue a LOI. Why? Because the broker fee is typically paid at closing by the lender. The fees range is based upon the complexity of the deal, the time needed for proper analysis and securing loan quotes from lenders. Fee amount typically ranges from 0.50 point to 3 points.

The Broker fee is different than the other loan fees. There are other loan fees that you will have to pay either at acceptance of the quote and/or at closing. Typically, fees that are paid at time of quote include origination fee, appraisal, engineering, environmental and credit. Be wary of having to pay a large sum of money up-front. Other common fees that are paid at closing include legal, underwriting/administrative, processing, document preparation, recording, etc.

Do you need to use a Commercial Mortgage Broker?

If you are looking at small commercial deals (<$200,000) then you can probably secure the financing yourself. However, for deals larger than that, you should use a Broker, so that you get the best underwriting analysis and best rate for your deal.

What To Include In Your Real Estate Development Business Plan

Do you need a real estate development business plan? You will if you want to obtain financing for your project. The first thing any lender or private investor will want to see is your real estate development business plan. This plan is specific for development of real estate. Your business plan will tell your story in an organized and concise manner. It will provide all of the critical information needed to judge your project. A well-written and professional looking business plan is crucial for your success in obtaining financing.

Most real estate developers make the mistake of not creating a good business plan or even getting professional assistance in developing their business plan. They will use the excuse of not having enough time or they can�t find the data. Don�t let that be your excuse! All a real estate development business plan really is, is the answers to a bunch of questions! You will learn what to include in your real estate development business plan.

Executive Summary

The Executive Summary should provide a complete overview of your project & company. This will include:

Brief description of the overall project. For example, develop a 4 star, 250 room luxury hotel in downtown St. Louis, Missouri.
Brief overview of the company � Is it a corporation, LLC, etc? Who are the owners and/or board members? Brief company history & experience level.
Brief summary of the market & demand.How large is the market and at what stage of development is the market currently in?
Brief summary of the competition and what separates you from them?
Brief description of key Management team members.
Key financials - total acquisition & construction costs, nature & use of funds, future revenue & expenses.

The Executive Summary should be brief and an outline to your overall business plan. Now lets take a look at the specifics in the real estate development business plan.

The Company

This part of the business plan should give full details about how and when the company was formed. It should indicate the legal structure of the company, as well as where it is licensed. A key piece of information about the company is the company owners. Name all of the principals and their percentage of ownership.

Project Description

This section of the plan is where you explain your project in detail. Remember, you are selling your project so that you can get the funding you need! Is this a hotel development project? Is this a luxury, single-family home community project? Is this a multi-tenant shopping center? Give all the details about the project. For instance, lets continue with our hotel example. You will want to name the other amenities that will be located at the hotel, such as swimming pool, tennis courts, the number of conference rooms, etc. How many of the rooms will be suites? What other features & benefits will your project have?

You will also want to address where you currently are in the project. Has the land been purchased or optioned? Where are you in the permitting process? Has the architecture plans been drawn? How much time & capital has been spent on your project to date?

The Market

In this section you will provide the market type & size, current & potential growth rate, and relative stage of development of the area. You should also address why you chose this particular area. You should discuss any forthcoming changes in the market, government regulations, economy, and short-term & long-term trends. If you have performed any feasibility studies, you will want to include it as well as the source of the feasibility study.

The Marketing Plan

The main objective of any developer, is to sell the homes, the stores or the hotel. And this can only be accomplished with a well thought out marketing plan. Who will handle your sales efforts? Will they be in-house or out-sourced? How will the pricing/leasing/room rate be determined? Will there be any brand or strategic partnerships involved? What is your marketing budget (in a table format).

The Competition

Any lender or investor in your project will want to feel comfortable that you know who your major competitors are. They will want to know that you have done a thorough competitive analysis. Name and describe all key competitors. What are their strengths & weaknesses? How will your project compare? What are your projects strengths & weaknesses?

The Management Team

In this section, you will want to go into further detail about the principals involved. You will need to highlight the team�s relevant experience and previous successful projects?

Well what if this is your first project?

Then you want to make sure that you have an excellent support team in place. These team members should have the experience that you are lacking (team members doesn�t necessarily mean company ownership). These team members can be legal, accounting, construction, architecture, etc. So for this section of the real estate development business plan, you will want to include:

Resumes/biographies on all principals & management team members
Organizational chart
Board of Directors

The Financials

Since the primary objective of your business plan is to obtain financing, you will want to address what type of financing you are seeking and how much capital is needed. You will want to state how much money you have on hand (and where did you get it from) and how much money you have spent to date.

Everything that you have put into your real estate development business plan up to now should support your financial assumptions and projections. You will want to include a statement that shows a breakdown of construction and acquisition costs. You will want to include an Income statement that will outline income and expenses for the next five years after construction. It should follow GAAP (Generally Accepted Accounting Principles) and contain specific revenue & expense categories. You will want to include a Balance Sheet and Cash Flow Analysis.

Now that you know what to include in your real estate development business plan, make sure that your business plan presents itself in a professional manner.

Use a table of contents, with numbered pages.

Make sure that the writing style is simple and conversational.

Don�t use long or complex sentences.

Paragraphs should be short & simple.

Use graphics & pictures but don�t get carried away.

Use charts & tables to back up your data.

State all sources of your data and studies.

Proofread your real estate development business plan for grammatical and spelling errors.

Have someone else proofread it for you.

If you have the resources, hire a professional business plan writer.

Initial Documentation

Property Information

Previous 2 years and year to date Income and Expense statement, or income tax statement for previous 2 years are required.

Rent Roll (multi-family) or Lease Summary (commercial) including square footage of units.

Copies of leases (if commercial) Rental Agreements (if multi-family).

Property description including age, construction type, square footage, amenities.

Location Map (from a Thomas Guide).

Color Photos: (a) Front/ Rear of subject property / (b) Street scene / (c) Neighborhood.

Borrower Information

Current Financial statement of borrowing entity and each principal.

Profit & Loss statement if owner/ user.

Use of loan proceeds.

Original purchase information (if refinance).

Previous 2 years tax returns (if available).

Copy of purchase contract (if purchase).

Credit Authorization / Current credit report.

Broker Fee Agreement with Borrower / Borrowing entity.

Rental Properties To Be Built Information Checklist

Executive summary including borrowing entity financial statement (ideally audited) and time from construction commencement through construction completion and income stabilization.

2. Borrowing entity principals�/ guarantors financial statement (any liens � judgments?)

Borrowing entity resume/track record:
- Project Description (s) including
- Construction Budget - Goal vs. Actual
- Construction Time - Goal vs. Actual

Borrowing entity/principals schedule of real estate owned, including current value , encumbrances, and personal guarantees pledged.

Banking References

a) Detailed line item summary of all hard and soft costs

b) Source and Uses of Funds Required To Build & Complete Project

Market Analysis : a) if project for rent, market comparable rentals � (rental, rate/absorption rate) b) if project for sale, market comparable sales closed in past twelve (12) months

If project is for rental: a) five year income/expense pro-forma b) summary of anticipated lease terms and rate prior to construction c) if expansion of existing property, past three years income expense statements of existing operating entity.

Photos, Exterior, Interior �As Is� and artist rendering as proposed, an Aerial if available.

Site Map (Plan)/ what was on site before project. Description of adjacent area for environmental, floodplain review.

Architectural/Engineering Plans

Documentation of local agencies� approval(s)

General contractor-bondable-up to what amount? Any liens or judgments? Resume and track record
Construction contract � what type? Ideal contract is guaranteed maximum price and all subs bonded.

Income Producing Properties
Information Checklist

Past three (3) years Actual Income/Expense Statements.

Current Month Rent Roll.

Lease Summary/Abstract (incl. start/end dates, square footage, cam charges).

Interior and exterior photos of building(s).

Current Year Income/Expense Statement (YTD).

Five Year Income/expense Pro-forma.

Borrower Resume and Summary of Real Estate Track record.

Statement of net worth of borrowing entity and principals of entity.

Site Plan.

If acquisition, copy of executed purchase contract.

For Sale Properties Construction Lender Information Checklist

Borrowing entity Financial Statement (any liens/judgments?
Narrative summary of project in its entirety including mortgage request and source and use of funds0

Borrowing entity track record:
- Project(s) Completed Description (s)
- Construction Budget - Goal vs. Actual
- Construction Time - Goal vs. Actual
- Profits - Goal vs. Actual

Borrowing entity/principals schedule of real estate owned and financial statements

Banking References

Detailed line item summary of all hard and soft costs

Market Analysis of sales closed of comparables during past twelve(12) months (absorption rate)

Aerial photos

Site Map (Plan)/ what was on site before project. Description of adjacent area for environmental, floodplain review.

Architectural/Engineering Plans

Evidence of all appropriate zoning/permit approvals

Credentials of marketing entity

General contractor-bondable-up to what amount? Any liens or judgments? Resume and track record

If project is single family sub-division, will developer be selling lots only or finished homes? Forecast of lot/home pre-sales

Sceptre Mortgage offers creative loan programs for all types of commercial properties � from $500K up to $10M. Our rates are aggressive and quick closings are a priority. But that's just the beginning of our service. Throughout the lending process we provide regular loan updates and progress reports so clients always know the status of their loan.

As a professional in the commercial lending industry, I pride myself on providing outstanding service through constant communication with my clients. That means you can count on me to always look out for your best interest, and to keep you informed throughout every step of the lending process.Sceptre Mortgage prides itself on our customer service and dedication to finding the right solution to close commercial deals. Please do not hesitate to call or email if you have questions about the information you find here on our web site

No Income Verification (NIV), No Income/No Asset (NINA) & No Documentation Loans

No Income Verification (or Stated Income) loans are available to borrowers who, for one reason or another, do not wish to or are unable to verify their annual income. An example of such borrowers includes those who are self-employed or on a commissioned salary, those who obtain revenue from sources they do not wish to divulge or those that receive all or a portion of their income in cash. While available from some lenders as fixed or adjustable rate loans, the interest rate and/or costs may be slightly higher than normal to reflect the higher degree of risk involved in loaning to borrowers whose incomes have not been verified. Such risk is often offset to some degree by borrowers who have significant verifiable assets or who are borrowing only a small percentage of a property�s value.

No Income/No Asset loans are the next level of reduced documentation loans. This loan type does not require income or assets to be verified. This, again, adds an additional level or risk, typically adding to the rate and requiring strong credit.

No Documentation loans are just that. An application is filled out, credit is run and that's about it. Income, Assets and employment are not even stated on the application. The interest rate and Loan to Value is determined by the strength of your credit.

Reduced documentation loans are increasing in popularity, particularly with the increasing number of self-employed people. Underwriting guidelines have not adapted yet to the new economy or the tax-minimizing strategies employed by savvy businesspeople. Until that day, these programs offer a high degree of flexibility with a minimal amount of penalty in a slightly higher rate (the better your credit and the more you document, the lower your rate). These programs can provide up to 95% financing, even on the No Doc.

Construction/Lot Loans

Our Construction-to-Permanent Loan is a one-time close loan designed to build or rehabilitate a primary residence or second home and obtain permanent financing. One-time close means one loan. Start to finish. You sign one set of loan documents that covers both the interim construction phase and the permanent loan phase. This eliminates the need for multiple loans to get you into your new home. With this single loan, you can purchase the land for your home and complete the construction. When the construction has been completed, the loan automatically converts to a permanent mortgage loan without another application or additional closing fees. You may choose from several loan products (Fixed and Adjustable Rate Mortgage (ARM)) and rate lock options that offer a variety of features. The construction period may vary in length from 6 to 18 months.