If you are looking to secure a commercial mortgage
In contrast to residential mortgages, commercial mortgages are more difficult to compare the rates and criteria as they are not widely advertised. Additionally, the conditions and terms differ greatly from one another, which stands as another research obstacle.
If you are looking to obtain a commercial mortgage, get in touch to get the process started. We can connect you with a lender within our wide network and lay out clear options for you to consider.
Types of Commercial Mortgages
There are a number of properties that are classified as commercial. Obvious examples include offices, industrial buildings, and retail facilities, but investment residential properties that are purchased with the intent to rent out, can qualify for commercial mortgages as well.
Depending on how your commercial property is classified, the value of the property dictates the maximum amount of a mortgage you are able to secure.
Qualifying for a Commercial Mortgage
In general, commercial mortgages are more difficult to procure and have very specific criteria that must be satisfied. This is because commercial mortgages are often much larger than residential ones and repayment of the loan depends on the success of the business.
As mentioned, loans for commercial properties vary from contract to contract, but all lenders require the borrowers to have excellent credit ratings. Other areas lenders will scrutinize include:
- Debt-service coverage ratio (DSCR), which is a measurement of a borrower’s cash flow to their debt obligations, including payments for interest and principal.
- Current business situation, meaning whether a business is operating before a mortgage is requested and if the business is profitable and your financial projections for the near, medium, and long-term future.
- Down payment. A higher down payment of about 50% is required for a commercial mortgage, though it can be less or more, depending on your risk profile.
If you are looking to apply for a commercial mortgage, contact us or schedule a call back. We will be happy to discuss your needs and what options are available to you.