Lender's spread is the fly in the ointment and it varies significantly from lender to lender.
The interest rate for a commercial property is comprised of an index, such as the 10-year T-bill, and the lenders spread. Lenders spread variance in pricing is due to the lack of three critical issues that need to be addressed about the property:
- Market Conditions
- Property Operating Performance
- Property Condition and Characteristics
These three issues will apply and vary from one property to another. Every commercial property type, including office, retail, industrial, self storage, mobile home park, mixed use, hotel, healthcare, and 5+ unit multifamily need to address these 3 issues in their loan package in order for the lender to narrow down the pricing into the most favorable rate.
If the mortgage broker does not address these three issues in their loan package, then there is no way for a lender to narrow down the pricing or lock your borrower into the most favorable rate.
For more information and/or quotes from multiple lenders click here: http://1stop-mortgage.com/commercial-loans.htm
Property taxes take a beating supporting early retiring government employees. Senior employees are good for government providing they can do the job. With much of the government unionized in an archaic form, it is difficult to terminate or sideline an employee. Unlike a construction unions, where, if the worker is undesirable, the contracting firm can fire that employee. If that union member has issues that make him or her undesirable, that person simply does not get hired.
Reforming government unions should be high on the list of taxpayer reforms. A new competitive union needs to rise similar to that of the United Brotherhood of Carpenters for government employees. Benefits would accrue to the workers and hiring and firing decisions would originate with the government employer. Employees would be terminated as workplace changes dictate without penalty to the employer. Those hired would be on an as needed basis. Tenure would be replace by an apprentice program.
It is either that or some entrepreneur needs to step up to the plate and fashion a skilled workers program (similar to Manpower or other outside contracting agencies) to outsource jobs for all the categories of government workers. Naturally a mega agency would be too ambitious a start, but basic services could be outsourced.
Pressure needs to be put on government unions to reform or be replaced. Government is getting too expensive. Cost cutting reforms without cutting service has simple solutions but entail lots of political wrangling.
If employees work longer it give local, state or federal governments the benefit for having to pay fewer years of retirement. Considering many retire after 20-years service at 70% pay, the financial drain on taxpayers is enormous.
Taxpayers could get almost double the bang for the same dollar by insisting local, state or federal employees reach 65 years of age or work 40-years before they are eligible for retirement. That would put them on par with the majority of working Americans. There is no reason to treat government employees as a privileged class.
“The world is a dangerous place to live – not because of the people who are evil but because of the people who don’t do anything about it.” – Albert Einstein, scientist
Apply a property tax guide to any home or property: Get the right values and plug in the figures for your house. Don't get stuck on the learning curve scratching you head what to do next. Eliminate mistakes in property taxes and property tax appeals.
Existing home sales are dropping sales at the fastest pace in 18 years. New home sales have improved slightly. The good news is the mortgage rates have dropped for the time being. Naturally, all hinges on the inflation fears and the perceived direction prices are going when the Federal Reserve eyeballs them. The sub-prime problems hurt the lender as much as the borrowers being the mortgage companies have to find a buyer to recoup their investment.
With the declining real estate prices in many parts of the country, now is a good time to scrutinize comparable market values to your home. In a declining real estate market winning your property tax appeal is almost a sure thing. Housetaxax.com is an excellent source of property tax appeals. House Values & Property Taxes Confidential information on house market values for property tax appeals.
Further housing weakness will be triggered by a credit crunch was predicted by UCLA Anderson Forecast in a recent Investment Business Daily article.
UCLA Anderson Forecast predicted growth to rise and a fed funds rate to 4.5% from 5.25% and they see at least two, if not three, Fed rate cuts keeping economic growth this year in positive territory. Lower mortgage rates are on the horizon.
With a 8 1/2 month backlog of housing inventory, a drop in mortgage interest rates would rev up a few engines. The National Association of Realtors said that pending home sales rose 0.7%, a gain that came despite bad weather and the impact from subprime mortgage problems.
Unsold home inventory shot up 5.9% in February to 3.75 million while the average 30-year fixed-rate mortgage was 6.16% in February according to Freddie Mac.
Existing-home sales 3.9% rise in sales for February. It would take 6.7 months to sell off the excess inventory of homes at the current real estate sales pace.
Subprime woes have left the housing industry in an adjustment phase with borrowers with poor credit defaulting on mortgage loans. Estimates suggest it will cut housing demand by 100,000 to 200,000 units annually.
Rising subprime mortgage defaults can add 500,000 homes to the U.S. real estate inventory according to a Bloomberg morning report. Speculation looms for New Century as they consider bankruptcy. In the meanwhile, new mortgage lending is halted at New Centrury.
