What is a Commercial Mortgage?
Seeking a loan for a commercial reason? If so, a commercial mortgage is perfect for you. Learn what a commercial mortgage is all about by continuing on with this blog post.
A commercial mortgage is simple, it’s a loan for a commercial reason. Similar to residential mortgages, commercial mortgages consist of an individual borrowing money, and then paying it back in installments. However, the difference between commercial mortgages and residential mortgages is commercial mortgages are borrowed by a business, rather than an individual, so the loan terms are based on the business’s credit history and the credit history of the business owner, rather than a home buyer.
One reason a business may be interested in a commercial loan is to develop land or buildings for commercial use. If this is why you’re seeking a commercial mortgage, make sure to check your company’s budget. Be sure you have enough money to make payments on the mortgage, while also developing the land or buildings. Even though a commercial mortgage makes it easier to pay for business expenses, you can’t forget to make payments on the mortgage itself.
Before finalizing a loan, check out the loan to value ratio. The most common commercial mortgage loan to value ratio is between 55 and 70 percent. Staying within this average range is beneficial and valuable to borrowers.
When gaining approval for a commercial mortgage, a business should try and have good credit and value. The value of a business itself can help the company get a loan without appearing high risk.
For help with commercial mortgages, contact Shop Commercial Mortgage! We can help individuals with commercial loans, so what are you waiting for? Call Shop Commercial Mortgage at 813-516-5210 today! We hope to work with you soon.