What is commercial real-estat financing ? Page 2

Before sealing the financing deal, the lender would like to ensure if the project or property is

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worth lending a huge amount. To evaluate the property for its viability, lender looks into the income it produces as compared to debts and interest on it. If the ratio of net operating income divided by debts, called debt coverage ratio, is above 1.2 then financing the project is considered safe. A ratio below this indicates that property is loosing money or anyhow breaking even. Some lenders like to see debt ratio which is arrived at on dividing monthly debts or housing expenses by gross monthly income. Usually debt ratio of above 25 percent is not considered safe for investment by the lenders but some may raise the bar to even 36 percent. So, lower debt ratio is more likely to ensure easier commercial real estate financing.

While searching for right commercial real estate financing lender, make use of commercial mortgage lenders database that enables direct access to your type of lender and therefore you avoid falling in the hands of brokers. The database is available on internet. All you do is to give adequate information in the ( life insurance ) commercial real estate financing application and the database matches information for locating the lender as per your loan requirement.

Commercial real estate financing enables you in acquiring the property of your ( remortgages ) choice. For a better deal you may hire a real estate attorney to scrutinize the offers from different lenders.