FREQUENTLY ASKED QUESTIONS
Answers To All Your Questions
WHAT IS A COMMERCIAL MORTGAGE AND HOW DOES IT DIFFER FROM A RESIDENTIAL MORTGAGE?
A commercial mortgage is a loan used to purchase or refinance a commercial property such as an office building, retail space, or industrial property. The primary difference between a commercial mortgage and a residential mortgage is that the former is used to finance income-generating properties, while the latter is used to finance a primary residence.
WHAT TYPES OF PROPERTIES CAN BE FINANCED WITH A COMMERCIAL MORTGAGE?
Commercial mortgages can be used to finance a wide range of properties, including office buildings, retail spaces, warehouses, manufacturing facilities, apartment buildings, and mixed-use properties.
WHAT ARE THE TYPICAL TERMS AND INTEREST RATES FOR COMMERCIAL MORTGAGES?
The terms and interest rates for commercial mortgages can vary widely depending on the lender, the borrower's creditworthiness, the type of property being financed, and other factors. Typical terms for commercial mortgages range from 5 to 30 years, with interest rates ranging from 3% to 10%.
WHAT ARE THE QUALIFICATIONS AND REQUIREMENTS FOR GETTING APPROVED FOR A COMMERCIAL MORTGAGE?
The qualifications and requirements for getting approved for a commercial mortgage depend on the lender and the specific loan product. Generally, lenders will consider factors such as the borrower's credit score, financial history, debt-to-income ratio, and the property's cash flow and value.
HOW MUCH DOWN PAYMENT IS REQUIRED FOR A COMMERCIAL MORTGAGE?
The down payment required for a commercial mortgage can vary depending on the lender and the specific loan product. Generally, borrowers can expect to put down between 10% and 30% of the purchase price or appraised value of the property.
HOW LONG DOES IT TAKE TO OBTAIN A COMMERICAL MORTGAGE?
The time it takes to obtain a commercial mortgage can vary depending on the lender and the specific loan product. Generally, borrowers can expect the process to take anywhere from a few weeks to several months.
CAN I REFINANCE A COMMERCIAL MORTGAGE?
Yes, borrowers can refinance their commercial mortgage to take advantage of lower interest rates or to free up equity in the property.
WHAT ARE THE FEES ASSOCIATED WITH OBTAINING A COMMERCIAL MORTGAGE?
The fees associated with obtaining a commercial mortgage can vary depending on the lender and the specific loan product. Generally, borrowers can expect to pay fees for appraisal, legal services, loan origination, and other expenses.
WHAT IS THE PROCESS FOR APPLYING FOR A COMMERCIAL MORTGAGE?
The process for applying for a commercial mortgage typically involves completing an application, providing financial statements and tax returns, and providing documentation related to the property being financed.
WHAT IS THE DIFFERENCE BETWEEN RECOURSE AND NON-RECOURSE COMMERCIAL MORTGAGES?
Recourse commercial mortgages hold the borrower personally liable for the loan, while non-recourse commercial mortgages limit the lender's recourse to the property being financed.
CAN I USE A COMMERCIAL MORTGAGE TO BUY A PROPERTY FOR MY BUSINESS OR TO RENT OUT TO TENNANTS?
Yes, commercial mortgages can be used to purchase properties for a business or to rent out to tenants.