Frequently
Asked Questions:
Does Commercial Capital Advisors charge Upfront?
No! The subprime meltdown,has brought many residential mortgage brokers that are representing themselves as commerial brokers. These individuals have found that commercial borrowers will pay sometimes thousands of dollars upfront for what they believe to be consulting and assistance in securing a loan. This is an unethical practice and in many cases, outright fraud since the transactions may not fit into any lenders guidelines and no or little attempt is made to secure financing for the prospective borrower once the fee is paid. Commercial mortgage brokering is unregulated in most states. Borrower legal recourse is limited at best. We do not request any monies for 3rd party fees until we provide an official written term sheet based on preliminary underwriting findings and initial due dilligence . Our fees are limited to required 3rd Party reporting and a $1,000 good faith processing fee. If you are not knowledgeable about commercial lending or commercial real estate it would be wise to seek the assistance of a trusted financial advisor.
Request for Stated Income
Commercial loans are not residential loans. Income producing properties are based on the net revenue stream of the the property based on it current lease-up, market rents and historical income and expenses. Many residential mortgage brokers are advising borrowers based on personal income and credit scores. Beware, in most cases, you are being groomed for a higher cost commercial loan sometimes with onerous terms. There are cases where this type of loan applies when a property that is not performing according to market, a bank turndown, it is a smaller loan, bridge financing does not apply and the borrower has a stable income from other sources and a superior credit score is in place.
Can Commercial Property be Acquired with No Money Down?
Institutional Commerical loans are not made at 100%. Most loans, with the exception of SBA loans are made with 20%-25% down and often a "B" note is allowed at 85% loan to value.
How long does the process take?
If the required documentation from the guarantor/borrowers in a refinance or the buyers are
made readily available in a timely fashion, several quotes
will be provided within hours. We do not solicit or except funds from prospective borrowers until we have determined that your transaction if viable and you find our wrtten pre-approval and loan terms acceptable. Timely receipt of requested items can alleviate the delays in the initiation and processing of your loan. We can close in an average of 30 - 45 days. That's faster than most banks and traditional lending instituions.
Who
orders the title policy?
We order the title because it enables us to manage the deal
and keep the process moving. We
have relationships with title companies who understand the
endorsements we require and are
responsive to our needs. But we will use your legal council to close if that attorney is an agent for an approved title insurance provider.
What
if the title is already in process?
We will try to avoid duplication but the title agent must
be an approved agent of an acceptable title insurer.
How does the appraisal process work?
After we receive a signed application
from the borrower and the necessary upfront deposits are received, we will order the appraisal. The appraisal is not available to the borrower until the loan is closed or the appraisal fee is paid in full.
Will you accept an existing appraisal?
Yes, if from a licensed
appraiser, but may not be valid if market conditions have changed or older than 6 Months. Appraisals must also be acceptable, often reviewed by a review appraiser and must be recertified with permission of the lender if another lender is involved. Note: Lenders cannot accept appraisals ordered by borrowers. It is against federal banking laws.
What
type of income verification do you require?
Depending on the business structure and the type of entity; we may require up to 3 years. The term "borrowers" can apply to entities or individuals. We require borrower(s) to verify their income through documenting
3 years of personal and/or
business tax returns. In some cases, we also can use Stated income depending
on the transaction and loan type.
Stated means we verify employment, we don't verify the amount
of income stated. In non-recourse lending, the loan is supported by the historical net operating income of the property as well as the projected income forward for the term of the loan.
