If it’s a commercial mortgage you’re looking for Certified Mortgage Broker’s can help you to close the best deal. Because a commercial mortgage is a contract with a business, organisation or partnership, the process is a lot more complex than with residential mortgages.
The reason is that the creditworthiness of the business rather than the individual is assessed.
What is a commercial mortgage?
A commercial mortgage is a loan taken on commercial property, such as shops, offices or factories. As with a residential mortgage the property serves as security on the loan. Interest rates on commercial mortgages are higher than those on residential properties, but these are tax-deductible expenses.
The term of a commercial mortgage typically shorter than the term of a residential mortgage with terms of between three and ten years. Commercial mortgages frequently end with a balloon payment.
These mortgages can take twice as long to finalise as residential mortgages. Most commercial loans have prepayment penalties and lockout phases during which paying off the mortgage will result in penalties.
You can purchase residential property with a commercial mortgage as long as it is to be used for investment purposes.
Qualifying for a commercial mortgage
your business will have to fill the following criteria
Debt to Service Coverage Ratio
A Down Payment
Property and Loan Value
A Property Surveys
Fees incurred in buying a commercial property
Property Appraisal costs may vary by type of property and the size thereof.
Property surveys are conducted by engineers so they can be pricey. The survey will ensure that environmental and building code regulations are all met.
Save Your Time and Money!
When it comes to commercial mortgages there are many fund sources out there, and it pays to know which ones to turn to as this can save time and money. The traditional banks, for example, won’t fund all types of commercial properties. Private mortgage lenders can assist you when the traditional mortgage providers won’t. They are also a lot more flexible and can tailor a deal to meet your needs.
You can save a lot of time and frustration by consulting a mortgage broker early in the process. Certified Mortgage Brokers can also help you to find the best rates and conditions in the industry as we have dozens of lenders on our books, many specialising in different types of commercial mortgages.
Certified Mortgage Brokers has helped thousands of clients to make the right choices when it comes to making financial decisions.