Commercial Mortgage

Commercial mortgages are somewhat similar to conventional mortgages except they are usually secured with a lender against commercial property, though residential property may also be used as collateral.

Commercial mortgages typically have a higher rate of interest than regular home mortgages because a commercial mortgage will pose a more significant risk to the lender.

Developments that May Require a Commercial Mortgage:

  • Retail properties
  • Multi–family units
  • Self-storage developments
  • Manufactured housing communities
  • Office complexes
  • Industrial Parks
  • Student Housing
  • Hospitality Complexes
  • Healthcare Complexes
  • Golf Courses

Most commercial mortgages, both loans that will finance the refurbishing of an existing property and the construction of new developments, involve loans worth millions of dollars.

One type of commercial mortgage is the conventional construction loan, which is generally used for the construction of new developments. The amount loaned, in the case of the conventional construction loan, is usually calculated by assessing the development’s appraised value along with the forecasted construction budget and current interest rates.

In order to qualify for a commercial mortgage a borrower must be looking into financing real estate that is a multi-purpose, industrial, commercial, retail, office or a multi-residential property with more than five units.

The property that is being financed should be in an active resale and rental market where current market rents exist for similar properties, and where the property is easily marketable.

Commercial mortgages require a current appraisal and should pass environmental and building evaluations.

These mortgages can have fixed or adjustable rates can last anywhere from 5 to 25 years.

Commercial mortgages can be the first step towards building the restaurant you always dreamed about owning or the housing development that you know will take off in the future.