Use Real Estate Loans to Finance a Commercial or Residential Property

20 July, 2014

Use Real Estate Loans To Finance A Commercial or Residential Property

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

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

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-

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