It is important to know that not all lenders and brokers are fully prepared for all of the different financial issues that you and your business could face. This is why it is crucial for borrowers to be aware and prepared for any potential financial issues that they could be faced with then it comes to commercial mortgages. It is best to rely on yourself than your lender or broker.
Sourcing is one of the most common commercial mortgages mishaps that should be avoided at all costs. This happens when a documentation of the down payment source for the purchase is required by the lender. They can also require the verification of the funds for the payment. This is called seasoning, which could take a long time, up to a whole year.
Recall terms are another problem that borrowers could face with commercial mortgages. These recall terms could allow the lender to collect payment from the borrower before the due date. Usually, these recall terms must be present in the loan agreement for this to happen.
Commercial lenders often times will include recall terms in the business loan agreement. However, if terms are not specifically notes in the agreement, there is a chance that you could be forced to repay the payment sooner than expected and on short notice. This is another reason it is important to work with a trusting lender that communicates with you effectively and outlines the terms clearly.
To avoid having to deal with recall terms at all, you can find lenders who do not use them. It is beneficial for both parties to try to come up with a plan and refinance with a borrower before having to mess with recall terms. But since agreeing on refinancing terms is not always a luxury that you may have, try to find a lender that doesn’t deal with recall terms or be prepared so that you do not have to worry about this issue.
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.