As a mortgage broker,Loan Philosophy: The Difference A Course In Miracles Lenders and Investors Articles I have the pleasure of seeing quite a number of potential loan transactions. I used the word “potential,” because not all of them work out.
Actually, there are quite a few turkeys in with the swans!A common scenario is a refinance or a purchase where the investor comes to me with something like: “Man, this is the BEST property in the area, it’s worth $5 Million Dollars, and I’m buying it for $3 Million! I need a 90% loan and I need it NOW!” OK … so I’ve exaggerated just a bit. In reality the value of the property will probably be accurate for the market, but I’ll still get the request for the high loan to value. Until recently, I probably couldn’t have gotten a 90% loan on a commercial property except in the limited case of a Small Business Administration guaranteed acquisition loan.
First, because no one offered a 90% loan on commercial property and second, because the property most likely wouldn’t have supported the debt service. The big change in that scenario has been the advent of the “small balance commercial lender” in the last couple of years.