Private investors, banks or Commercial Mortgage brokers are some of the options through which you can obtain commercial mortgage. It is preferable to obtain commercial mortgage banker or a broker as your lender than a private investor.
Now between a broker and the banker, it is unto an individual to choose. The advantages of choosing a banker are its low costs transactions and also offer better rates. But the drawback is that the chances of getting selected is minuscule that means that you will be shown the door more often. But with brokers you are likely to find you the perfect solution but it come with a price. Also if you are looking for a special type of loans or deals then heading for a broker is the best thing.
A Commercial Mortgage is very complex compared to a household mortgage loan so do not just dwell on rates and charges.
First, consider how much you can (and should) borrow. Most standard Commercial Mortgage programs will give you up to 80% of the property value and require you to come up with a 20 to 25 percent down payment. But, if you are willing to pay a somewhat higher interest rate, you can borrow more than 80% and perhaps with less of a down payment. Also, check around with different commercial mortgage lenders to see if you will be permitted to get a second loan against the property if you ever want one. You may well want that option.
Also, watch out for balloon payments. These may look highly attractive, but later on when they balloon you could wind up with a payment that drives you nuts--or, you might even lose your commercial property. While you're checking into this, also find out if the Commercial Mortgage is assumable--that is, if you can pay it off early without penalties. If you can get one that is assumable, this is always the better option, even if you have to take a bit of a higher interest rate.
Check out for the processing time of each mortgage transaction by the mortgager as this is the most time-consuming when it comes to getting a Commercial Mortgage. Lookout for lenders with reputation of giving quickly mortgages as it saves you lot of time but are on the lookout for clauses included in the agreement. Each mortgager has their own practice and stipulates conditions which vary from each. If you are going to a bank for a mortgage then you have to deposit some of your assets as a surety while some requires a guarantor.
Different Commercial Mortgage lenders also have different stipulations regarding how much documentation you'll need to provide--both before and after the loan is closed. You may have to pull docs out of your nose; you may be bound to give quarterly reports after the loan is closed, with penalties including possible default if you fail to do this. Make sure you know all about these stipulations before you sign on any bottom lines. If one lender isn't to your liking, talk to another (once again, using a broker can really streamline this process for you if extra cost is no obstacle to you).
And, of course, when looking for a Commercial Mortgage lender, if you find more than one who can meet your personal demands, compare prices: origination, points (if any), processor fees, title searches, and so on.
Wade Henderson - very Professional - 15 yrs in the Business Finance Field - reputation for getting the deal done.
IMMFinancial.com - Invenstment Property Mortgage - Industrial Mortgage
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