Commercial Mortgages

Larger down payments are required

Mortgage Agent > Types of Mortgages > Commercial Mortgages

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As the term suggests this is a mortgage directed towards a commercial property. Commercial properties come in all shapes and sizes. Typically a commercial property is a piece of property used for commercial activity such as a storefront, office building or factory. A residential building that has 5 or more units is deemed commercial for mortgage financing.

Mortgage financing on commercial properties is not as straight forward as residential lending. Larger down payments are required and the approval process can take much longer.

A commercial lender is much more concerned with the property itself and the income potential of that property. Because the commercial property is usually used to generate income the lender will approve the mortgage financing based on the strength of this income potential. The borrower does not always have to have the personal income to support the mortgage as the property itself can do this. The borrower however will need to have the down payment required and show good borrowing habits by way of credit report.

Appraisals are more costly for commercial mortgages and the mortgage product choices are less then with residential lending.

Not all mortgage lenders do commercial lending. Some lenders will only lend on specific properties. The mistake allot of borrowers and Real Estate Agents make when purchasing a commercial property is thinking that the mortgage financing process is the same as residential mortgage financing. It is not. Commercial mortgage financing can take up to 60 days to get fully approved if not longer and both the Real Estate Agent and the borrower need to know this before making an offer.

Seeking the advice and guidance of a Toronto Mortgage broker is essential when obtaining mortgage financing for a commercial property.

Speak to Robert Clancy today to receive more information about Commercial Mortgages for your Toronto based or GTA based business.