How to get a Commercial Real Estate Loan?

Are you on the lookout to expand your business? You must either be wanting to set up a new facility- a store, warehouse, office, etc. or might be longing to expand an existing one. Whatever the reason might be, funding can be a significant challenge to conquer. That is when commercial real estate loans come into the picture. Let us delve into the intricate details.

What is a Commercial Mortgage?

Commercial mortgages are for buying any land or property for business purposes. This mortgage is quite similar to a traditional one where the money is borrowed and secured against a property. Through securing a business to a property, they tend to be the principal resource for financing and business development plans. The difference between a commercial mortgage market and a residential one is that the former represents a smaller market share.

What do you need to know about applying for a commercial mortgage?

Numerous lenders are offering commercial mortgages. You must know the trick to choosing the right one.

Mortgage Term

You might find it surprising, but the loan term can vary dramatically from 5-40 years. It is a huge financial commitment, so you must understand what you want from your commercial mortgage and your mortgage lender's wants.

Repayment

As real estatelenders in the USA, interest rates are typically higher than with residential mortgages. You are most likely to be required to offer a more significant deposit of at least 30%, which equates to a lower loan to value rate, with the upside being more significant equity.

Credit history

You cannot deny that your credit history will play a more significant part in whether or not your commercial mortgage application goes through.  Apart from this, you will also need to provide a comprehensive picture of your company, including projections and a business plan.

We hope that this post proves to help you get a residential mortgage without any hassle.