Financing Residential & Commercial Properties
with Real Estate Loans
Real estate is one of the most lucrative investment options. Besides using it for
investing, people acquire real estate to have a comfortable and sprawling residence. Real estate is also used
to further a person's business and commercial interests. Although enticing, buying a desired real estate is
beyond the financial capabilities of most of us. Without the real estate loans to finance the purchase, the
dream of owning the real estate would essentially remain unfulfilled.
Real estate loans can be taken to purchase a commercial property or a residential one. Commercial real
estate loan can be taken for properties like guesthouses, hotels, restaurants, pubs, shops, nursing homes,
warehouses, industrial facilities and leisure resorts etc. Residential real estates loans can be taken for the
purchase of mansions, bungalows, farmhouses, apartments and other dwellings.
Real Estate Loans use the property in consideration as the collateral. It means that the borrower has
legally agreed to put the real estate as the security for the loan. The lender will be holding the title deed
of the real estate with him and the borrower gets it only after he has repaid the entire loan with interest. If
under any circumstances the borrower is not able to keep up with the repayment schedule, the lender is free to
sell the real estate and recover his amount.
Real estate loans are available for huge amounts. Residential real estate loans can range from $25000 to
$100000 and upwards. The commercial real estate loans are capable of funding real estate purchases up to
$1000000. Lending amount is restricted by the value of real estate, the repayment capacity of the borrower and
his credit history. The APR's (Annual Percentage Rates) on real estate loans range from 6% to 20%. A borrower
has the option to choose between a fixed rate and a floating rate interest regime. The real estate loans can be
repaid in 30 years. However, the borrower can choose a repayment period of 25, 20, 15 or 10 years. The shorter
the repayment period for the real estate loan the lower will be the loan cost. However, the monthly
installments towards the repayment will become higher as the repayment term decreases.
Lenders require that the borrower should contribute some percent of the entire value of the real estate.
This is known as down payment. Lenders prefer if the borrower is able to put at least 20 % of the total value
as the down payment. The balance of the real estate loan will be divided in equal monthly installments
according to the repayment term. Paying a higher down payment will result in a smaller loan amount and smaller
monthly installments.
Applying for a real estate loan becomes very simple if the online method is used. Online lenders do not have
any application fee as compared to regular lenders. In addition to this the online application process is
streamlined and does not require hefty documentation. The variety of real estate loans and their repayment
options can be easily researched by using the lenders websites.
Whether a borrower gets the best or not on his real estate loan will depend on how carefully he chooses his
lender. Since, a real estate loan is a long-term commitment to repay a substantially high amount, any hidden
clause or fine print that threatens to drive things in the favor of lender can be detrimental to the borrower's
interest. To remedy such a situation a borrower must hire a competent real estate attorney and scrutinize the
fine prints carefully. Thus, by negotiating the best deal a person can get the right real estate loan to
finance his dreams.
About the Author: Aldrich Chappel has been associated with get-secured-loans,since its
inception.Having completed his Masters in Finance from Lancaster University Management School,he undertook to
provide useful advice through his articles that have been found very useful by the residents of the UK.To Find
Secured loans,loans for homeowners,best secured loans UK visit http://www.get-secured-loans.co.uk
Get More Information: How to Make Money in Real Estate
