When purchasing or investing into commercial properties, commercial mortgage loans are commonly used. Some types of commercial use include a business premise that may be in need of expansion, development of property and investing into residential as a commercial investment. Flipping properties or purchasing properties as an investment.
What are the differences between Commercial real estate loans and residential loans?
For those of you who may be looking to purchase a residential owner occupied property and it consists of four units or less and then the financing for that type of property would be considered a residential home loan. A commercial loan would be a residential property of having 5 units or more, such as an apartment building. When looking for commercial mortgage loans, pricing and interest rates are a bit different than residential home loans. In this article we will go more into commercial real estate loan rates.
Commercial Mortgage Rates
Commercial mortgage loans interest rates are typically higher than interest rates for residential home loans. Many lenders of commercial real estate loans consider investment into commercial properties as risky. This is because the repayment of these loans are dependent on the performance of the business. So what happens here is that the lender is going to perform a thorough assessment of the application, the business and subject property. From this an interest rate can be determined. Basically it is risk assessment and due diligence on their part.
Those businesses that have been around for a long time, have shown stability and good standing can usually secure a commercial loan easily. The max length of time for this type of loan is usually 25 years. Ask your loan officer for what terms are available for then type of commercial mortgage that will suit your needs. They can also explain the commercial real estate loan requirements.
Many will ask what is the current interest rate for commercial mortgages? So as you can see, the lender needs to know more about the deal in order to determine the commercial mortgage interest rate.
Perhaps you are reading this because you have a need for commercial real estate financing of commercial property or residential real estate investing (non owner occupied) or have a need for expansion or development. Well here at Commvestor Funding, we can help. Let us be of assistance and take advantage of our lender network.
We have several lender relationships in our network that want to take a look at your deal. These lenders are hand selected by us and they will explain their loan process to you and disclose fees and down payment requirements.
If you are looking for a home loan for a house that you will occupy, we cannot be of assistance with this. All of our commercial lending products are for commercial properties and residential non owner occupied.
Utilizing the services of a commercial mortgage broker like us helps the borrower find the best source of commercial real estate financing with the best commercial mortgage lenders.
Call us or use the form below to get in touch with us so we can help you get started.