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Commercial Mortgages
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COMMERCIAL MORTGAGES

COMMERCIAL MORTGAGES ARE MORE COMPLEX

If it’s a commercial mortgage you’re looking for Certified Mortgage Broker’s Barrie can help you to close the best deal. Because a commercial mortgage is a contract with a business, organisation or partnership, the process is a lot more complex than with residential mortgages.
The reason is that the creditworthiness of the business rather than the individual is assessed.

What is a commercial mortgage?

Residential Properties Differences
Commercial Mortgage Barrie

A commercial mortgage is a loan taken on commercial property, such as shops, offices or factories. As with a residential mortgage the property serves as security on the loan. Interest rates on commercial mortgages are higher than those on residential properties, but these are tax-deductible expenses.

The term of a commercial mortgage typically shorter than the term of a residential mortgage with terms of between three and ten years. Commercial mortgages frequently end with a balloon payment.

These mortgages can take twice as long to finalise as residential mortgages. Most commercial loans have prepayment penalties and lockout phases during which paying off the mortgage will result in penalties.

You can purchase residential property with a commercial mortgage as long as it is to be used for investment purposes.

Qualifying for a commercial mortgage

To qualify for a commercial mortgage,
your business will have to fill the following criteria

Debt to Service Coverage Ratio

Debt to service coverage ratio – a measurement of the amount of cash that you have available to service your debt. Companies should ideally have a 1.25 debt to service ratio to qualify.

A Down Payment

Lenders will require you to invest some of your own money in the property. Depending on the perceived risk you could be asked for anything from 20% to 50% down payment.

Business Plan

Debt to service coverage ratio – a measurement of the amount of cash that you have available to service your debt. Companies should ideally have a 1.25 debt to service ratio to qualify.

Property and Loan Value

The value of the property and the loan to value ratio.

A Property Surveys

Consult your broker
We'll save you thousands and yet we cost you nothing!

Fees incurred in buying a commercial property

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Legal Fees

Legal fees as with all mortgages.

Property Appraisal Costs

Required to value the property.

Property Survey

To determine the condition of the property.

Administration

Administration costs.

Property Appraisal costs may vary by type of property and the size thereof.
Property surveys are conducted by engineers so they can be pricey. The survey will ensure that environmental and building code regulations are all met.

Save Your Time and Money!

Consult a Mortgage Broker

When it comes to commercial mortgages there are many fund sources out there, and it pays to know which ones to turn to as this can save time and money. The traditional banks, for example, won’t fund all types of commercial properties. Private mortgage lenders can assist you when the traditional mortgage providers won’t. They are also a lot more flexible and can tailor a deal to meet your needs.

You can save a lot of time and frustration by consulting a mortgage broker early in the process. Certified Mortgage Brokers Barrie can also help you to find the best rates and conditions in the industry as we have dozens of lenders on our books, many specialising in different types of commercial mortgages.

GET ADVICE

And make the right choice

Certified Mortgage Brokers Barrie has helped thousands of clients to make the right choices when it comes to making financial decisions.

We have the experience and the contacts to save you time and money.
Catch Your Opportunity!
We can help you get pre-approved!
Call us or request a call back.