Commercial Mortgages
What is a Commercial Mortgage?
If you plan on purchasing a property or land for business purposes, a commercial mortgage may be a suitable financing option for you. This type of mortgage is similar to a traditional residential mortgage or collateral mortgage, where the property is used as collateral to secure the loan. However, commercial mortgages are specifically designed for businesses and commercial entities, and are offered by commercial mortgage lenders. The loan amount can be used to purchase or refinance commercial properties such as office buildings, retail spaces, warehouses, and more. With a commercial mortgage, you can get the necessary funds to start, grow or expand your business.
For a commercial mortgage, the loan-to-value ratio may be lower, which means that the loan may cover less of the total value of the property. Commercial loans can take the form of 1st, 2nd, or 3rd mortgages.
We advise speaking with our experienced team of mortgage advisors to help you understand the world of commercial loans. We can be your trusted partner and help you get the loan that is right for you and your business. Different types of properties may qualify for commercial mortgages:
- Raw land
- Factories
- Apartment
- Institutional and specialty properties
- Land servicing and development
- Retail plazas
- Office units
Commercial Mortgage Process
When applying for a commercial mortgage, an appraisal is typically required to determine the property’s value. Depending on the type of land or property being purchased, an environmental study may also be necessary. The lender will assess the risk of the borrower based on several factors, including income statements, lease agreements, and the condition of the property. It is important to have a financial plan in place to show potential monthly revenue from the property, which could help reduce interest rates. As with any mortgage, it is crucial to carefully consider all aspects and have a thorough understanding of the terms and conditions before committing to a commercial mortgage.
We tailor all Commercials Mortgages & Industrial Mortgages
If you are planning to purchase land or property for business purposes, a commercial mortgage might be the way to go. Similar to traditional residential mortgages, commercial mortgages are secured by the property being purchased. Commercial and industrial mortgage loans are loans made between businesses and commercial mortgage lenders, and they can take the form of 1st, 2nd, or 3rd mortgages.
Private commercial mortgages can be particularly beneficial in challenging business situations, such as when time is limited, credit history is poor, liquid assets or income are lacking, the property type is unique, or power of sale or foreclosure is imminent. Hard money commercial real estate mortgages can be a lifesaver in times when a company’s success is in jeopardy. By tapping into the equity available in real property, private commercial mortgage loans allow business owners to access liquid cash and put it to use in their companies.
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