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can you get a mortgage for commercial property

Can you get a mortgage for a commercial property?

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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

Want to know if you qualify for a commercial mortgage? Get your commercial property valued by Platinum Mortgages Ottawa!

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!

Contact Platinum Mortgages Ottawa for the most competitive mortgage interest rates for your commercial property!

Did You Know That You Can Improve Your Business Capacity through a Commercial Mortgage?

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Like any other mortgage, a commercial mortgage is also available on providing your property as a collateral. Commercial mortgage provides an opportunity to the businesses. It provides businesses with an opportunity to establish and expand. A commercial mortgage is preferred for the properties and assets that produce running income as there is a direct comparison of the income and the expenses. It is given out on the basis of the financial standings of the company, and not on the basis of the individual’s financial position. So a well-established firm has a higher possibility of availing a commercial mortgage than a newly established firm.

 How Does Commercial Mortgage work?

Firstly, the borrower ought to be a company as it cannot be availed on an individual’s name. Commercial mortgages can be availed by keeping a business asset under the mortgage. Generally, these mortgages are taken upon office building, warehouse and other working assets involved for administration purpose in a company. The proceeds of a commercial mortgage are used to either refinance existing debt obligations or acquire property or for the expansion of a business. Residential properties can be mortgaged under commercial mortgages, only if they have been held for the purpose of investment and not for any residential purpose. An additional condition for the property to be eligible for these mortgages is that the properties should have a market, and they should be eligible for letting out.

Since commercial mortgages are in the name of the company and not in the name of the individual, the borrowers do extensive background checks for the persons who are involved in the management of the company. While availing the commercial mortgage, all the important financial documents and financial statements of the company.  Apart from these, the growth report and the other developmental aspects of the company should also be presented.

The benefits that an entity can attain out of a commercial mortgage are:

Rental to self-owing

Most commercial mortgages in Canada are taken upon residential properties investment, which is then rented. It is beneficial to the mortgage taker as the company need not invest a lot of owned capital.

Availing of the loan

Commercial mortgage approval relies primarily on the income generation of the asset being mortgaged. So if there are income producing assets with low risk in the change in their income, approval of a commercial mortgage upon that asset is easy for companies.

Contact Platinum mortgages in Ottawa to know the right mortgage suited to our financial needs