Facts Regarding Multifamily Loans That You Should Be Aware Of
For sure, you know about the saying “the family that eats together stays together” but surely, you do not know about the saying “the family that takes on multifamily loan together stays together”. For those of you out there who are still new to the concept of multifamily loan, this is actually a type of loan that is usually given to families that want to invest in an entire apartment block or perhaps, a gated society that will house their family members alone.
Albeit the fact that both mortgage companies and banks are extending their service to cater this kind of loan, it would be best for you to get them off from developers and builders as these professionals are the ones known to extend this kind of loan. On the other hand, if you insist on going with a bank for this loan, what you can do best is to choose a bank that caters to commercial and residential loans since you can expect them to welcome potential multifamily loan applications. While on the surface, you may think about how multifamily loans and traditional loans have no difference but the thing is that, they actually differ in more ways than one, especially on the paperwork since multifamily loans have much more when compared to the latter. Not only that, multifamily loans will also require all the borrowers they have to provide the same number of documents, which many of us may think as a hassle. Albeit the fact that the documents required for multifamily loans are no different from the documents required for traditional loans, the thing is that they are lengthier because its borrower must include the following: title policy of the property, tax returns and also, financial statement that includes three months of bank statements. Indeed, the process of getting all these paperwork in shape is a huge challenge and may be overwhelming for some but the reward that comes after will all be worth it.
Another thing about multifamily loan that we want you to know of is the fact that the loan amount extended for it reaches eighty percent of the capital. If you are wondering why this is the case, well that is due to the fact that this is the only security lenders will have if there is a default. On the other hand, for families out there who cannot afford to come up with the twenty percent of the eighty percent, there is nothing for you to worry about as we will bring you a good news. We want you to know that there are now so many lenders out there who are willing to offer a much higher financing limit provided that what you are investing in is undisputed and free from any legal trouble and that all the paperwork you have is intact.