Mortgage Do's And Don'ts
Mortgages can be tricky, and it's easy to make mistakes that can end up costing you dearly. That's why we've put together this list of Mortgage Do's and Do not's to help you navigate the process with ease - and a little bit of humor.
DO: Shop around for the best mortgage rates
DON'T: Assume your bank will give you the best rate just because you have a checking account there. Remember, loyalty is a two-way street.
DO: Have a budget in mind
DON'T: Get in over your head. Just because you can technically afford a million-dollar mansion doesn't mean you should buy one. You don't want to be house-poor and unable to afford groceries.
DO: Get pre-approved before house-hunting
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DON'T: Assume you'll be approved for a mortgage just because you have good credit. Pre-approval is important because it gives you a better idea of how much house you can afford and shows sellers that you're serious.
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DO: Consider your future plans
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DON'T: Assume you'll live in your new house forever. Life happens, and you may need to sell sooner than you think. Make sure you're not getting into a mortgage that you can't realistically afford if you need to move in a few years.
DO: Get pre-approved before house-hunting
.
DON'T: Assume you'll be approved for a mortgage just because you have good credit. Pre-approval is important because it gives you a better idea of how much house you can afford and shows sellers that you're serious.
.
DO: Consider your future plans
.
DON'T: Assume you'll live in your new house forever. Life happens, and you may need to sell sooner than you think. Make sure you're not getting into a mortgage that you can't realistically afford if you need to move in a few years.
DO: Read the fine print
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DON'T: Sign on the dotted line without reading the terms and conditions. There may be hidden fees or clauses that could come back to haunt you later.
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DO: Be prepared for unexpected expenses
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DON'T: Assume everything will go smoothly. There may be unforeseen expenses, like a leaky roof or a broken furnace, that can quickly drain your savings. Be sure to budget for these types of surprises.
DO: Read the fine print
.
DON'T: Sign on the dotted line without reading the terms and conditions. There may be hidden fees or clauses that could come back to haunt you later.
.
DO: Be prepared for unexpected expenses
.
DON'T: Assume everything will go smoothly. There may be unforeseen expenses, like a leaky roof or a broken furnace, that can quickly drain your savings. Be sure to budget for these types of surprises.
DO: Have a good sense of humor
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DON'T: Take everything too seriously. Yes, buying a house and getting a mortgage can be stressful, but try to find the humor in the situation. After all, laughter is the best medicine for a stressful day.
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By following these Mortgage Do's and Do not's, you'll be well on your way to successfully navigating the mortgage process - with a smile on your face. Good luck, and happy house hunting!
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š¼ CRE Financing Explained: Everything You Need to Know š¦
š Understanding CRE Financing: A Beginnerās Guide to Commercial Real Estate Loans š”
CRE Financing Explained: How It Works and Why It Matters
Commercial Real Estate (CRE) financing is the backbone of investment and business growth. Whether youāre purchasing an office, retail space, multifamily building, or warehouse, understanding how CRE loans work is key to structuring a profitable deal.
Unlike residential mortgages, CRE loans are designed for income-producing properties and are typically offered to entitiesāsuch as LLCs or corporationsārather than individuals. They involve more complex underwriting standards, higher loan amounts, and detailed financial reviews.
Types of CRE Financing
Here are the main types of CRE loans investors and business owners use:
Ā·Conventional Bank Loans: Standard term loans with fixed or variable rates. Great for established borrowers with strong credit and income.
Ā·SBA Loans (504 & 7a): Ideal for owner-occupied properties and small business expansion.
Ā·Bridge Loans: Short-term financing used to acquire or stabilize a property before long-term financing.
Ā·Construction Loans: Fund ground-up development or major renovations.
Ā·CMBS Loans: Commercial Mortgage-Backed Securities offering non-recourse options and competitive rates.
Ā·DSCR Loans: Designed for investors focused on property cash flow rather than personal income.
Key Loan Factors to Understand
Lenders analyze several critical components before approval:
Ā·Loan-to-Value (LTV): Typically 65ā80%, depending on the property and loan type.
Ā·Debt Service Coverage Ratio (DSCR): Measures the propertyās ability to cover loan paymentsāmost lenders want 1.20x or higher.
Ā·Property Type and Condition: Retail, industrial, medical, multifamily, and special-use properties each carry unique risk levels.
Ā·Borrower Experience & Financial Strength: Lenders prefer experienced investors with strong liquidity and reserves.
Why Work with a Mortgage Broker
A seasoned mortgage brokerālike Medallion Fundsācan help structure the best deal possible by:
Ā·Accessing 600+ lenders including banks, private capital, and non-recourse programs.
Ā·Comparing loan terms, rates, and fees to fit your investment strategy.
Ā·Navigating appraisals, underwriting, and closing efficiently.
Ā·Saving time while ensuring your financing aligns with your project goals.
Final Thoughts
Whether youāre purchasing your first investment property or expanding your portfolio, understanding CRE financing is essential to your success. With the right structure, financing can unlock leverage, increase ROI, and accelerate portfolio growth.
š Connect with Medallion Funds today to explore your best financing options for commercial real estate.
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Ā© 2023-2024 Bill Rapp, Medallion Funds LLC, Director of Capital Advisory
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