How a Commercial Real Estate Broker Can Help You

Commercial real estate is a booming business; however, whether you are buying or selling commercial real estate, chances are that you are going to need a bit of help. A good real estate broker can be invaluable to you, and they can provide you with a great deal of help that no one else could ever give to you. If you want to have a successful career in the commercial real estate business, then more than likely you will need to work with a commercial real estate broker from time to time. The following are some of the great ways that a commercial real estate broker can be of help to you.

Local Land Values

Having a commercial real estate broker working with you can be very helpful when it comes to local land values. As an investor, you may not always be investing in commercial real estate that is in your area, and it can be hard to find out what the land values are in the area that you are considering investing in. When you work with a commercial real estate agent, they usually have a good grasp on local land values and can help you make good decisions based upon this information. This saves you having to do a great deal of research on your own to find out the same information.

Access to City Officials

If you have been working in the commercial real estate field long, you know that there are many times in this line of work when you have to deal with various city officials. At times this can be difficult, since you may not be familiar with them and you may have a hard time finding time to speak with them. When you work with a commercial real estate broker, many times you will find that they already have direct access to the city officials, which can expedite your deals much of the time.

Negotiation and Constructing Offers

Another great reason to have a commercial real estate broker is that they can do a great deal of the negotiating for you on a deal. It is usually better to have a broker as a go-between instead of dealing directly with the other person in a deal. A broker can usually more effectively negotiate the terms of a deal. They can also help you to construct offers as well so that you will be able to present a good offer on a piece of commercial property.

Exit Strategies

More than likely there will be some point in time when you will find it imperative that you get out of a commercial real estate deal. This can be hard to do on your own, but when you have a commercial real estate broker to help you, then can help you to come up with a solid exit strategy if you need it. When you get out of a deal, you need to have a great strategy that is totally legal, or you may end up losing a great deal of money. Having the commercial real estate broker there to help you can ensure that you exit the deal in a legal way that will not hurt you as well.

Referrals to Other Professionals

Commercial real estate brokers can also be of help to you by referring you to other professionals that can be helpful to you as well. This is especially great if you are new to the commercial real estate industry, you have just moved into a new area, or you are investing outside of the area when you live. It can be difficult to find good professionals to work with, such as lawyers, contractors, inspectors, and engineers. When you are dealing with a commercial real estate agent that you trust, they can refer you to other people that you can trust as well. This saves you the hassle of trying to find some of these professionals on your own without anyone’s recommendations to go on, which can be disastrous in some cases.

Lenders

Another area that a commercial real estate broker can help you with is the financing for your commercial real estate purchase. These broker work with a variety of different lenders from day to day, and if you are looking for financing for your venture, more than likely they can steer you in the right direction. They may even know of some private lenders that may be of some help to you as well.

First Grab at Targeted Properties

Having a commercial real estate broker can be very beneficial to you because they can also allow you to have first grab at some targeted properties that they know of. No doubt there are times when you find a great property, only to find out that it is already under contract and you spoke too late. If the broker knows what you are looking for, they may be able to pocket the listing so you can have the first chance at it.

When you do find a great commercial real estate broker, it is important that you hold onto them. A great broker can be invaluable and can help you out in a variety of ways that will help make you successful in the commercial real estate market. Working together with the same great broker over and over can be mutually beneficial to both of you. They will get the rewards of your business, and you will be able to enjoy the many benefits of working with an excellent commercial real estate broker that you can trust. When you find a good broker, they are definitely worth the money that you will pay out to use them.

10 Things Every Buyer Needs – To Close A Commercial Real Estate Loan

For nearly 30 years, I have represented borrowers and lenders in commercial real estate transactions. During this time it has become apparent that many Buyers do not have a clear understanding of what is required to document a commercial real estate loan. Unless the basics are understood, the likelihood of success in closing a commercial real estate transaction is greatly reduced.

Throughout the process of negotiating the sale contract, all parties must keep their eye on what the Buyer’s lender will reasonably require as a condition to financing the purchase. This may not be what the parties want to focus on, but if this aspect of the transaction is ignored, the deal may not close at all.

Sellers and their agents often express the attitude that the Buyer’s financing is the Buyer’s problem, not theirs. Perhaps, but facilitating Buyer’s financing should certainly be of interest to Sellers. How many sale transactions will close if the Buyer cannot get financing?

This is not to suggest that Sellers should intrude upon the relationship between the Buyer and its lender, or become actively involved in obtaining Buyer’s financing. It does mean, however, that the Seller should understand what information concerning the property the Buyer will need to produce to its lender to obtain financing, and that Seller should be prepared to fully cooperate with the Buyer in all reasonable respects to produce that information.

Basic Lending Criteria

Lenders actively involved in making loans secured by commercial real estate typically have the same or similar documentation requirements. Unless these requirements can be satisfied, the loan will not be funded. If the loan is not funded, the sale transaction will not likely close.

For Lenders, the object, always, is to establish two basic lending criteria:

1. The ability of the borrower to repay the loan; and

2. The ability of the lender to recover the full amount of the loan, including outstanding principal, accrued and unpaid interest, and all reasonable costs of collection, in the event the borrower fails to repay the loan.

In nearly every loan of every type, these two lending criteria form the basis of the lender’s willingness to make the loan. Virtually all documentation in the loan closing process points to satisfying these two criteria. There are other legal requirements and regulations requiring lender compliance, but these two basic lending criteria represent, for the lender, what the loan closing process seeks to establish. They are also a primary focus of bank regulators, such as the FDIC, in verifying that the lender is following safe and sound lending practices.

Few lenders engaged in commercial real estate lending are interested in making loans without collateral sufficient to assure repayment of the entire loan, including outstanding principal, accrued and unpaid interest, and all reasonable costs of collection, even where the borrower’s independent ability to repay is substantial. As we have seen time and again, changes in economic conditions, whether occurring from ordinary economic cycles, changes in technology, natural disasters, divorce, death, and even terrorist attack or war, can change the “ability” of a borrower to pay. Prudent lending practices require adequate security for any loan of substance.

Documenting The Loan

There is no magic to documenting a commercial real estate loan. There are issues to resolve and documents to draft, but all can be managed efficiently and effectively if all parties to the transaction recognize the legitimate needs of the lender and plan the transaction and the contract requirements with a view toward satisfying those needs within the framework of the sale transaction.

While the credit decision to issue a loan commitment focuses primarily on the ability of the borrower to repay the loan; the loan closing process focuses primarily on verification and documentation of the second stated criteria: confirmation that the collateral is sufficient to assure repayment of the loan, including all principal, accrued and unpaid interest, late fees, attorneys fees and other costs of collection, in the event the borrower fails to voluntarily repay the loan.

With this in mind, most commercial real estate lenders approach commercial real estate closings by viewing themselves as potential “back-up buyers”. They are always testing their collateral position against the possibility that the Buyer/Borrower will default, with the lender being forced to foreclose and become the owner of the property. Their documentation requirements are designed to place the lender, after foreclosure, in as good a position as they would require at closing if they were a sophisticated direct buyer of the property; with the expectation that the lender may need to sell the property to a future sophisticated buyer to recover repayment of their loan.

Top 10 Lender Deliveries

In documenting a commercial real estate loan, the parties must recognize that virtually all commercial real estate lenders will require, among other things, delivery of the following “property documents”:

1. Operating Statements for the past 3 years reflecting income and expenses of operations, including cost and timing of scheduled capital improvements;

2. Certified copies of all Leases;

3. A Certified Rent Roll as of the date of the Purchase Contract, and again as of a date within 2 or 3 days prior to closing;

4. Estoppel Certificates signed by each tenant (or, typically, tenants representing 90% of the leased GLA in the project) dated within 15 days prior to closing;

5. Subordination, Non-Disturbance and Attornment (“SNDA”) Agreements signed by each tenant;

6. An ALTA lender’s title insurance policy with required endorsements, including, among others, an ALTA 3.1 Zoning Endorsement (modified to include parking), ALTA Endorsement No. 4 (Contiguity Endorsement insuring the mortgaged property constitutes a single parcel with no gaps or gores), and an Access Endorsement (insuring that the mortgaged property has access to public streets and ways for vehicular and pedestrian traffic);

7. Copies of all documents of record which are to remain as encumbrances following closing, including all easements, restrictions, party wall agreements and other similar items;

8. A current Plat of Survey prepared in accordance with 2011 Minimum Standard Detail for ALTA/ACSM Land Title Surveys, certified to the lender, Buyer and the title insurer;

9. A satisfactory Environmental Site Assessment Report (Phase I Audit) and, if appropriate under the circumstances, a Phase 2 Audit, to demonstrate the property is not burdened with any recognized environmental defect; and

10. A Site Improvements Inspection Report to evaluate the structural integrity of improvements.

To be sure, there will be other requirements and deliveries the Buyer will be expected to satisfy as a condition to obtaining funding of the purchase money loan, but the items listed above are virtually universal. If the parties do not draft the purchase contract to accommodate timely delivery of these items to lender, the chances of closing the transaction are greatly reduced.

Planning for Closing Costs

The closing process for commercial real estate transactions can be expensive. In addition to drafting the Purchase Contract to accommodate the documentary requirements of the Buyer’s lender, the Buyer and his advisors need to consider and adequately plan for the high cost of bringing a commercial real estate transaction from contract to closing.

If competent Buyer’s counsel and competent lender’s counsel work together, each understanding what is required to be done to get the transaction closed, the cost of closing can be kept to a minimum, though it will undoubtedly remain substantial. It is not unusual for closing costs for a commercial real estate transaction with even typical closing issues to run thousands of dollars. Buyers must understand this and be prepared to accept it as a cost of doing business.

Sophisticated Buyers understand the costs involved in documenting and closing a commercial real estate transaction and factor them into the overall cost of the transaction, just as they do costs such as the agreed upon purchase price, real estate brokerage commissions, loan brokerage fees, loan commitment fees and the like.

Closing costs can constitute significant transaction expenses and must be factored into the Buyer’s business decision-making process in determining whether to proceed with a commercial real estate transaction. They are inescapable expenditures that add to Buyer’s cost of acquiring commercial real estate. They must be taken into account to determine the “true purchase price” to be paid by the Buyer to acquire any given project and to accurately calculate the anticipated yield on investment.

Some closing costs may be shifted to the Seller through custom or effective contract negotiation, but many will unavoidably fall on the Buyer. These can easily total tens of thousands of dollars in an even moderately sized commercial real estate transaction in the $1,000,000 to $5,000,000 price range.

Costs often overlooked, but ever present, include title insurance with required lender endorsements, an ALTA Survey, environmental audit(s), a Site Improvements Inspection Report and, somewhat surprisingly, Buyers attorney’s fees.

For reasons that escape me, inexperienced Buyers of commercial real estate, and even some experienced Buyers, nearly always underestimate attorneys fees required in any given transaction. This is not because they are unpredictable, since the combined fees a Buyer must pay to its own attorney and to the Lender’s attorney typically aggregate around 1% of the Purchase Price. Perhaps it stems from wishful thinking associated with the customarily low attorneys fees charged by attorneys handling residential real estate closings. In reality, the level of sophistication and the amount of specialized work required to fully investigate and document a transaction for a Buyer of commercial real estate makes comparisons with residential real estate transactions inappropriate. Sophisticated commercial real estate investors understand this. Less sophisticated commercial real estate buyers must learn how to properly budget this cost.

Conclusion

Concluding negotiations for the sale/purchase of a substantial commercial real estate project is a thrilling experience but, until the transaction closes, it is only ink on paper. To get to closing, the contract must anticipate the documentation the Buyer will be required to deliver to its lender to obtain purchase money financing. The Buyer must also be aware of the substantial costs to be incurred in preparing for closing so that Buyer may reasonably plan its cash requirements for closing. With a clear understanding of what is required, and advanced planning to satisfy those requirements, the likelihood of successfully closing will be greatly enhanced.

– You Can Get A Home Mortgage With Bad Credit

As the real estate market continues to grow rapidly and new technology gains ground, widely accepted beliefs that were true a few years ago may not be true today. Don’t jump into anything blindly or sign a real estate contract or home mortgage loan contract or any other type of contract without giving it some serious thought. Before you commit to a real estate purchase you’ll need to find a lender for the of your potential home or investment property.

Your income and your debts will typically play the biggest roles in determining what price range you should be looking at. Fifteen-year mortgages are an ideal option if you can handle the higher payments and if you’d like to have the loan paid off in a shorter period of time. Thirty-year fixed-rate mortgages offer consistent monthly payments for all of the 30 years that you have the mortgage. And if the market is good, you can benefit considerably from locking in a lower rate for the full term of the loan.

Most adjustable rate mortgage programs offer what is called “rate cap” protection, which limits the amount the rate can be increased each year and over the life of the loan and all adjustable rate mortgages are amortized over 30 years. Make sure to get an estimate of your closing costs from the lender you’ve chosen. By law, the lender is required to give you a statement within three days of receiving your loan application. Any of the loan programs for down payments of 20% or less require you to purchase Private Mortgage Insurance (PMI).

A mortgage application can be resubmitted many times; it’s not uncommon for this to happen. Interest rates can go up if a picture is painted of a rosy economy and that it is flourishing, like more jobs being available. This can lead to inflation which will make the rates go up. Any money that you receive from a lending institution will show up on your credit report and the payments will factor into your debt-to-income ratio.

A reported FICO credit score is not a requirement for most conventional or government loans like FHA loans or VA loans. Potential borrowers can submit information about income, assets and equity to determine just how much a down payment should be. This is usually processed through an automated underwriting system. Twenty-year fixed-rate mortgages allow you to make a consistently higher monthly payment throughout all 20 years you have the mortgage. The shorter term means you pay off the loan off quicker and pay less interest and build equity faster than with a 30 year loan.

Check with you CPA pr other tax advisor for the most current tax information; your property taxes may be deductible. If you’re working with a home builder within a sub-division or housing development and just making carpeting, lighting and appliance selections for a brand new home, you’ll probably be able to get a standard mortgage loan. If you’re hiring contractors, electricians, plumbers, and painters, you’ll probably need a construction loan, which provides funds to pay the subcontractors as the work goes along. If you plan to borrow money from other sources, some lenders may impose limits on how much of your down payment can come from other sources.

When financing real estate with a conventional loan it’s important to know that a low FICO credit score does not mean you won’t qualify for a home loan or home mortgage. The FICO credit score is just one of many factors that are considered in loan or mortgage applications. Although the FICO score is taken into account there are no minimum scores required.

Ask other homeowners for advice about what real estate and mortgage pitfalls to look out for. Work with a reputable mortgage broker or lender to create a customized loan program with the best combination for you of rates, points, and closing costs to meet your needs. Before you finish with any make sure you read every real estate contract and loan or home mortgage contract carefully before you sign on the dotted line. Each and every line is important – look for anything that’s vague or not clear and don’t be afraid to question what you don’t understand.

Easy Guide To

Besides the fact that it’s probably the average person’s largest financial transaction, buying or selling a home is one of those areas where mistrust and misconceptions are sure to be present. You can begin your education by asking friends, family, co-workers, real estate agents, real estate brokers, mortgage brokers and real estate professionals for help, search online for local lenders and get current interest rate quotes. Now before you apply for any , if you have a lot of bad credit because of consumer debt like credit cards or personal loans, you’ll want to try to eliminate or reduce this debt since it may affect your ability to qualify for a commercial or home mortgage and make the estimated monthly payment.

Keep in mind when you’re getting financing or refinancing that most people move or refinance within seven years. An adjustable-rate mortgage (ARM) means that the interest rate changes over the life of the loan, according to the terms that are specified ahead of time. If you’re working with a local builder within a sub-division or housing development and just making carpeting, lighting and appliance selections for a brand new home, you’ll probably be able to get a standard mortgage loan. But if you’re hiring contractors, electricians, plumbers, and painters, you’ll probably need a construction loan, which provides funds to pay the subcontractors as the work progresses.

Twenty-year fixed-rate mortgages allow you to make a consistent higher monthly payment throughout all of the 20 years you have the mortgage. The shorter term means you pay the loan off quicker and therefore pay less interest and build your equity faster than with a 30-year loan. The disadvantages of a fixed-rate mortgage include a possibly higher cost; these loans are usually priced higher than an adjustable-rate mortgage.

Your property taxes may be deductible so make sure to consult with your CPA or other tax advisor for the current tax information. Insiders know that the advertised mortgage rates are not always what you’ll get from the lender; it could be market fluctuations, economic news, any other of a dozen reasons, but interest rates can change throughout the day. If you’re having a problem getting a loan or home mortgage you might consider a lease-option on a property; a lease-option on the real property will allow you to set a good purchase price now, then apply a portion of the rent each month toward your down payment, building your equity in the process.

Work diligently with your mortgage broker or lender to develop an individual loan or mortgage program based on your credit worthiness. 15-year mortgages are an ideal option if you can handle the higher payments and if you’d like to have the loan paid off in a shorter period of time, for example, if you have plans to retire. There are plenty of options that are ideal for those people who have a few bad credit indications on their credit report.

The interest rate for an adjustable rate mortgage may be adjusted up or down at predetermined times which will make the monthly payment increase or decrease. If rates in the current market are high, you’ll probably get a better price with an adjustable-rate loan. Interest rates can go up if a rosy picture is painted indicating the economy is flourishing, for example more jobs being available; this can lead to inflation which will send the rates up.

If you’re a first-time home-buyer it’s possible that you may qualify for a lower down payment or a lower interest rate. You might want to check with mortgage brokers, online mortgage companies, your county housing department or your employer to see if they know of any programs available. A fixed-rate mortgage means the interest rate and principal payments remain the same for life of the loan but the taxes will probably change.

Make sure to get lots of advice about , mortgages, interest rates, mortgage rates, mortgage refinance, bad credit mortgages, etc., and think about what makes sense to you. Thinking positive about is important and so is being realistic. It is always good to know the truth about advertised current mortgage rates when you need .

Las Vegas -A Quick Overview

Whether you’re thinking of moving to Vegas with your family or considering investing in some commercial property there are plenty of companies specializing in Las Vegas that can help – Here’s a quick overview.

Who and where you get financing will depend on what type of housing you are looking at. Single family dwellings, condos, and townhomes all qualify for different types of financing.

There are financial institutes that specialize in the residential Las Vegas needs. Down payments, interest rates, and terms all depend on a number of factors. Besides traditional mortgages there are other types of Las Vegas available that have relaxed down payments, relaxed terms, and even relaxed credit requirements.

Besides the residential market there are investments in commercial properties and once again there are Las Vegas options that aren’t always traditional.

One of the reasons that Las Vegas has more flexibility is that there is an unwritten understanding that income can come from a variety of sources and not all income may be reported on the tax form. Right or wrong it isn’t up to the company’s that have Las Vegas on their minds to decide. They just want to lend money and make money.

And there is some great news for anyone that has had some credit troubles in the past and thus considered a higher risk. You will have no problem obtaining financing through one of the many Las Vegas conglomerates. They’ll simply charge you a higher rate of interest, give you less flexibility on defaulting, and be happy to take the property back if you miss a payment. And you too can earn a piece of Las Vegas.

When it comes to Las Vegas these institutes are also happy to base their loan to you on your declared income. There is no need to provide a pay stub or proof of employment. That means that if you want to own a home in the Vegas area there’s a very good chance that you can using a Las Vegas institute.

Now if you are about to play with the big boys down on the strip and invest in some commercial properly your Las Vegas agent is going to come from a different deck of cards. Generally speaking those that deal in Las Vegas for residential purposes don’t play in commercial.

Commercial loans require different down payments, different collateral, and different requirements to obtain the loan. Each circumstance is different so you’ll need to make an appointment with a an agent that deals with Las Vegas on the commercial end to see what they can do for you.

A quick search online will reveal many many Las Vegas experts that can help you obtain the funds you need to close that deal. So what are you waiting for?

Copyright © 2007 Joel Teo. All rights reserved. (You may publish this article in its entirety with the following author’s information with live links only.)

– What You Should Know About Home Mortgages

As the nation’s real estate market continues to grow and new technology gains more ground, many widely accepted beliefs that were true just a few years ago may not be true today. Before you go after a home mortgage or home loan or any , if you have a lot of bad credit because of consumer debt such as credit card or personal loans, try to eliminate or reduce this debt as soon as possible because it’ll affect your ability to qualify for a home mortgage and the estimated monthly payment.

Some tips to know: whether you’re financing or refinancing. most people move or refinance within a seven year period. And loan programs for down payments of 20% or less require you to purchase Private Mortgage Insurance (PMI).

If you’re going to buy a second home or second property, you’ll need to identify the source or sources of your down payment, since you won’t be selling your current house and using the proceeds, and you’ll need to expect a larger monthly payment for housing and other related expenses too.

If you have a problem getting a home mortgage and the seller still owes money on the home you can check with your lender and see if you can get a wraparound mortgage. Although it’s not legal in all states, it will allow you to pay the monthly payment on the existing mortgage and an additional payment to pay the difference; make sure that a wraparound mortgage will not trigger a due-on-sale clause ask the lender in advance.

Many people are not aware that they may be able to customize the length of their loans. Ask the mortgage broker or lender you’re working with. Although lenders usually advertise 15-year loans and 30-year fixed rate mortgages, applicants can ask for 20 years, 25 years or any other number of years that would work better. This may allow borrowers to build up their equity faster and keep their monthly payments in a range they can afford. Some lenders may impose strict limits on how much of the down payment can come from borrowing from other sources.

Some of the advantages of adjustable rate mortgages that are touted include: lower costs – because they are usually priced lower than fixed-rate mortgages so you can increase your buying power and lower your initial monthly payments then if the interest rates go down, you’ll have lower payments. However in all the years I was in the real estate business I never advised anyone to get this type of loan. With the changing market trends one can find themselves in a heap of trouble just like that. This would be a last resort loan and one would have to be sure they were not going to be unemployed in the next few years.

If you’re working with a local builder within a sub-division or housing development and you’re just making carpeting, lighting and appliance selections for a brand new home, you’ll likely be able to get a standard mortgage loan. But if you’re planning to hire the contractors, electricians, plumbers, and painters, you’ll probably need a construction loan, which provides the funds to pay the subcontractors as the work goes along.

You will want to work with your mortgage broker or lender closely to develop an individual home loan or home mortgage program based on your credit worthiness. If you have or think you have a less-than-perfect or ‘bad credit’ credit report don’t worry too much about it. When financing real estate it’s important to know that a low FICO credit score doesn’t mean you won’t qualify for a home loan or home mortgage. There is much ado about the FICO score these days but there are many instances in which it isn’t going to interfere with getting a home loan or mortgage. If you do borrow money for a down payment it must be disclosed to the lender or if any of the money for your down payment was a gift, be ready to provide proof of it.

The 20-year fixed-rate mortgages allow you to make a consistent higher monthly payment throughout all of the 20 years you have the mortgage; the shorter term means you pay the loan off quicker and therefore pay less interest and importantly, build equity faster than you would with a 30 year loan. You’ll also need to take into consideration what the closing costs will be. Ask about the escrow account for taxes and insurance.

Make sure to ask other homeowners how they’re doing and what and home mortgage or loan pitfalls to avoid. And whatever you do don’t get yourself into a situation where you are unable to make the mortgage payments; make sure to think far ahead. Try not to get too overwhelmed with all the different home loan and mortgage choices available.

Make a list of questions and get the answers from any real estate agents, real estate brokers, mortgage lenders and any other real estate professionals you know or meet. Ask them about , home mortgages, home loans, refinancing and current mortgage rates. Go online and get home mortgage quotes. Online quotes can often be cheaper because of the elimination of middlemen for example. And compare the quotes with other quotes you get locally to find the best rates for you.

– Mortgages – Secrets Of The Trade

Don’t jump into anything blindly or sign any real estate contract or home mortgage loan contract or any type of contract without giving it serious thought. This year alone, Americans are expected to borrow $1.33 trillion in acquiring 7.4 million houses, condominiums and co-ops. If you have monthly obligations like car payments, credit card payments, personal loan payments, student loan payments, etc., be sure to take these into account when you’re determining your bottom-line affordability figure.

Be careful when working on your ; if you make too many loan inquiries, with applications, it may look like you’re shopping for credit; this can be a glaring red flag for many lenders. If you’re working with a local builder within a sub-division or housing development and just making carpeting, lighting and appliance selections for a brand new home, you’ll probably be able to get a standard mortgage loan; but if you’re hiring contractors, electricians, plumbers, and painters, you will probably need a construction loan, which provides funds to pay the subcontractors as the work progresses. Get an estimate of your closing costs from the lender you’ve chosen; by law, the lender is required to provide his statement to you within three days of receiving your loan application.

When financing real estate it’s important to know that a low FICO credit score does not mean you won’t qualify for a home loan or home mortgage. Some lenders may impose limits on how much of your down payment can come from borrowing from other sources. 15-year fixed-rate mortgages mean consistent monthly payments for all 15 years that you have the mortgage; you build equity even more quickly than with a 30-year or 20-year loan, and paying less in interest, you save money in the long run.

Keep in mind that adjustable rate mortgages are best for homeowners who aren’t planning on staying with a property for a long period of time. If you’re buying a second home or second property, you’ll need to identify the sources for your down payment, since you will not be selling your current house and using the proceeds, and you’ll need to expect a larger monthly payments for housing or other expenses too. If you have a less-than-perfect or a ‘bad credit’ credit report it may not be a problem.

With adjustable rate mortgages the initial interest rate is usually lower than with a fixed-rate mortgage and the monthly payment would also be lower. There are plenty of options that are ideal for those who have a few bad credit marks on their credit report. The situation for each buyer is unique.

Disadvantages of an adjustable rate mortgage include the possibility of increasing monthly payments if interest rates go up. People usually are not aware that they may be able to customize their loans; just ask the mortgage broker or lender; although lenders advertise 15-year loans and 30-year fixed rate mortgages, applicants can ask for 20 years, 25 years or any other number of years; this may allow borrowers to build up equity faster but keep monthly payments affordable. If you’re having a problem getting a home mortgage and the seller still owes money on the home you can check with your lender and see if you can get a wraparound mortgage; although not legal in all states, it will allow you to pay the monthly payment on the existing mortgage and an additional payment to pay the difference; make sure that a wraparound mortgage will not trigger a due-on-sale clause.

If you’ve applied to other lenders, when you finally do select a good lender you may have to explain why there are other inquiries from lending institutions on your credit report. If you do borrow money for a down payment it must be disclosed to the lender or if any of your money for your down payment was a gift, provide proof for it.

Take your time, study all the resources available online and offline and get lots of advice from several mortgage and real estate brokers and professionals before you do any or investing. You have to be careful not to assume that you can cut back on your expenses and stretch yourself into a house payment; you don’t want to be cutting into healthy eating habits by eating fast food or junk food for a house that you may not be well enough to live in for a long time – consider this when you first start out searching for the best . Remember that buying a home may be the single biggest investment you’ll ever make; invest carefully.