Can you get a mortgage for a commercial property?
A commercial mortgage can be used to get a commercial property! What is the criteria to qualify? Why should you choose a commercial mortgage for your commercial property? Read on to find out!
A commercial mortgage, in essence, is quite similar to a normal residential mortgage. The only difference between the two lies in the collateral used. While a normal residential mortgage would use a residential property as a collateral, a commercial property is used as a collateral for commercial mortgage.
Commercial properties have returns. These are usually represented by a business and not an individual. The business representing the property is the borrower of the commercial mortgage and will be liable to pay against the same. The income and financial status of the business would play a major role in the approval process for a commercial property.
What does it take to qualify for a commercial property?
Lenders are not as concerned about the individual and their income, they will look into the company and whether the company is eligible to be able to pay off the loan within the stipulated time. The business acts as the borrower and hence the business will be scrutinized!
The lenders look into these areas generally to determine whether a business is eligible to get a commercial mortgage for a commercial property:
- Creditworthiness of the business
- Amount of down payment you can put forth
- The growth chart of the business and it’s status in the current market
- Your credit rating
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The business has to be on a rise or on its way to receive a big push if you want a commercial mortgage lender to approve your loan for the commercial property. How the business has been running and what are the future projections you expect out of it will play a major role in deciding whether the lender will forward the sum to you.
Your income, though it may not play such a significant role, will also be in the lime light. Your credit ratings, your credit history and other business plans and performances in enhancement will be looked into before you get an approval for a commercial mortgage.
Why choose a commercial mortgage?
A commercial mortgage can be the reason you have turned your commercial property into a money making machine. Whether it is for renovations, business expansion or investment purposes, a commercial mortgage can make the difference you needed for your business to reach new heights.
A mortgage for a commercial property can be obtained with the help of a mortgage broker. Lenders will require a good presentation on what you intend to do with the money you receive and how you will use it. A mortgage broker can help you smoothen it out and ensure that you get the best mortgage for your commercial property at the best rates!