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Business Financing

What Is the Loan-to-Cost Ratio: Formula & How To Calculate

By Matthew Sexton on December 9, 2021 | Business Financing, What is

Man wearing formal attire doing some calculations.

The loan-to-cost (LTC) ratio is the relative comparison between the loan amount of a commercial mortgage and the total cost of a rehabilitation or construction project. The LTC ratio helps investors determine the riskiness of commercial real estate investments. It’s used primarily for two types of commercial mortgages: rehabilitation loans and construction loans. The higher…

What Is After Repair Value: ARV Formula & How to Calculate

By Matthew Sexton on December 7, 2021 | Business Financing, What is

A construction tool, sticky notes and laptop on top of a blueprint.

The after repair value (ARV) is the estimated value of a property after repairs and renovations are completed. It allows investors to determine a potential investment’s sales price, repair budget, and profitability. It is used when long-term investors estimate the long-term rental value of a property and when fix-and-flip investors buy, rehab, and sell properties…

Loan-to-Value (LTV) Ratio: What It Is and How To Calculate It

By Matthew Sexton on November 15, 2021 | Business Financing, What is

hand holding a magnifying glass inspecting a graph

The loan-to-value (LTV) ratio compares the size of a loan relative to the value of the property being financed. Regardless of what type of loan you apply for, a lender will calculate the LTV ratio as part of the approval process. The maximum LTV ratio varies depending on the loan type and borrower qualifications. For…

What Is a Portfolio Loan? Types, Rates & Terms Explained

By Matthew Sexton on November 8, 2021 | Business Financing, What is

calculator and toy house

A portfolio loan is a mortgage loan that is held by the mortgaging company and not sold on the secondary market to the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac). Portfolio loans help small business owners who cannot qualify for a traditional mortgage loan or who want…

5 Best Real Estate Portfolio Lenders

By Matthew Sexton on November 2, 2021 | Business Financing, Buyer's Guide

Dollar sign in hand

Portfolio loans are mortgage loans that aren’t sold to Fannie Mae or Freddie Mac on the secondary market. Small business owners that cannot qualify for a traditional mortgage or want to finance multiple properties with a single mortgage can turn to portfolio lenders for financing. Because portfolio lenders don’t have to use federal guidelines in…

5 Best Investment Property Loan Providers

By Tom Thunstrom on September 29, 2021 | Business Financing, Buyer's Guide

coins and toyhouse

Investment property loans are often found through online mortgage providers, investor-only lenders, and larger banks. Investment mortgages typically range from $75,000 to more than $2 million, requiring a minimum down payment as high as 25%. These rental property loans often have higher interest rates than conventional mortgages due to the perceived risk that the borrower…

How To Lease Commercial Real Estate: The Ultimate Guide

By Tom Thunstrom on July 27, 2021 | Business Financing, How To

hand holding a miniature business establishment and a key

A commercial real estate lease is an agreement that allows a business to rent commercial property from a landlord. Commercial leases come in three main forms: full-service leases, net leases, and modified gross leases. The process of identifying, negotiating, and signing a commercial lease is a long one. Knowledge of the necessary steps, which are…

Balloon Mortgage Calculator

By Allison Bethell on December 6, 2018 | Business Financing, Calculators

miniature house, pen and calculator

A balloon mortgage is a loan that offers low initial monthly payments, and then a large portion of the principal is repaid in a lump sum at the end of the term. A balloon mortgage calculator helps you calculate your monthly mortgage payment, your balloon payment and the total amount of interest paid during the…

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