Commercial Mortgage Loan
A commercial mortgage loan is generally used to acquire land or properties mainly for commercial use. Examples of properties that can be classified as commercial are shopping centers, apartment complexes, office buildings, land for commercial use, or industrial warehouses.
Commercial loans can also help to develop new or existing properties. A business owner could also use the money to extend the current premises of the company. Many business owners need an office for day-to-day operations. Depending on the different dynamics of your business, you may either want a warehouse to store your inventory or an office for customers. Having these properties will serve your business and act as equity and appreciation over time. Commercial Real Estate Loan Pros of St. Petersburg can help you develop your property with a commercial mortgage loan.
Typical lenders of this type of loan include traditional banks, hard money lenders, government-sponsored institutions, and life insurance firms.
Requirements for a commercial mortgage loan.
Requirements differ because not all commercial mortgage loans are the same. Conditions such as loanable amount, credit rating, and other terms will vary from one lender to another. Some of the financial documents one will need to be present are;
- Personal and business tax returns
- Financial business records
- Personal and business (checking and savings) bank statements
- Liability and assets statements
- Profiles of all directors’/ business partners and financial history
Commercial mortgage loan application process
Lenders will have to determine if you qualify first before giving you an application form. Factors like income, debts, and financial history will determine if you pass or fail the pre-qualifying test. Once your details are okay, you will then need to fill out the application forms.
The lender will require you to present banking statements for up to the last five years, tax returns, and financial statements. You also need to show the lender a plan that includes your projection earnings. Your credit score, collateral, and income will have to go through some assessment process. If all the paperwork is approved, your application is then passed on to the loan underwriter. At this point, your application will either be approved or denied according to the information on the documents. Loan processing may then take up to four months. The main reason being that all the documents need to undergo a verification process.
Typical repayment and interest terms for commercial loans
A conventional commercial mortgage loan is processed by original banks (traditional) offering fixed and inconsistent rates ranging between 5% to 7%. With a duration of up to 10 years, a down payment of more than 20%, and a good credit score. On the other hand, traditional commercial mortgage loans are 85% or less of the loan-to-value (LTV).
Hard money lenders offer loans at a higher interest rate with a repayment period of up to 24 months. Interest rates are high in this case because the lender only looks at the value of the property and not credit ratings. If you need a quick financial fix, then this type of loan will not suit your demands. Would you like to have a smooth process when applying for a commercial mortgage loan? Then, please visit Commercial Real Estate Loan Pros of St. Petersburg to begin the journey of financial greatness.
There are so many areas or regions where we offer these services with most of them being cities.
However, if you need any of these services, you need to contact us. The list below comprises the areas where we offer these services.