morgage informations

[yiannakis 0]

i wanna ask if i can get a morgage from the bank to buy a semi commercial building 4 appartments+2 stores costs 400,000$ and i will pay 50,000$ cash i have a good credit and i dont work at all since last year and i want to buy the building for income is it easy to get a morgage.

 

Thank u

[MichaelC 160]

yiannakis, welcome to The Naked Investor!

As for your specific abilities to obtain a mortgage, there are many factors that go into that decision.

Good credit is certainly helpful, and a positive in your favor. On the not so helpful side is the fact that you are presently not employed.

The bottom line is you can probably obtain a mortgage, yiannakis. I have seen cases where I thought for sure the applicant looking to buy one of my properties didn't have a prayer. Guess what? I was wrong and they were the happy owners of their own home.

The best advice I can give you is to shop your needs around to several mortgage brokers in your area. Preferably someone who has been recommended to you. Once you have spoken to three or four brokers, you'll know where you stand and what you'll need to do to qualify.

Good luck!

[Dave T 0]

yiannakis,

 

I am not quite as optimistic as Michael. You are looking at a mixed use property, which probably means that a residential loan officer will refer you to the commercial loan department for financing.

 

The commercial loan underwriting guidelines make it a little tougher to get financing, and (the last time I talked with a loan officer about a commercial loan) required at least a 20% down payment. The property will have to cash flow -- in bank terms, this means that your net operating income must be at least 130% of your debt service. By the way, the loan will be amortized over 15 years, with a 5 year balloon. When the balloon comes due, the bank can (at its option) renew your note for another five years.

 

If you have done quite a bit of business with the bank, and you have a proven track record, the loan officer can relax these standards somewhat. Suggest you talk to your local lenders to get an idea of the underwriting standards that would be used if you were to apply for a loan to purchase this property.

 

Dave T

[MichaelC 160]

Dave is correct in his observation. I discounted too much the fact that the property you want to finance is of the commercial/mixed use variety. That does change the picture as was pointed out in Dave's reply.

Still, the best advice is to not prejudge your abilities to obtain financing. Rather, contact a variety of people in the know about these things, the actual decision makers if you can, lay your cards on the table and see what kind of deal is available to you.