If you want to own a commercial property, you are probably going to end up researching the terms of a commercial mortgage in order to do so. This is a type of mortgage that is similar to a residential mortgage, which you would get in order to own a home. However, the commercial type of mortgage is made with an agreement between the bank and a business. This can make it more difficult to assess the credit of the organization, but there are many factors that help the lender to assess the credit situation. Here we are going to talk about some of the differences between this type of mortgage and a residential mortgage so you can understand some of what you are getting into when you begin your search.
There are a few things you should consider as you are searching for the perfect commercial mortgage. For instance, you are probably going to need more money at first than you would with a residential mortgage. Though you may be able to pay only 15% of the total price at first, you might want to try and pay around 25% of it if possible. This will help you ensure that the monthly payments are lower throughout the next ten to twenty years. If you pay less at first, you may end up paying more later on. This is one thing to keep in mind as you consider your mortgage options.
Another thing that you should be aware of with commercial mortgage options is that it is not uncommon to have to pay every three months instead of every month. This can make a difference when you want to plan out your finances as you go. If you want to pay every month, you can talk to the lender about this scenario. If they say that you have to pay every three months, then you may have to get used to this situation.
You should also be aware of the fact that for a business, the interest you are paying on the mortgage is tax-deductible in many cases. This means that even if there is a high interest rate, it does not mean the same thing that it means if you are talking about a residential mortgage. If you keep this in mind, it will help you with your fiscal planning of the following year. You should make sure that someone in your business who is handling the tax situation is aware of this and can advise you on the different commercial mortgage situations that are available to you.
The most important thing to do is to have someone on your side that can help you navigate these options. You will see that commercial lending is a different type of situation than residential lending; but it still makes sense. As long as you can afford the loan over the next ten to twenty years, you will be able to find success with this system. You simply need to understand how the commercial mortgage affects your taxes and the financial situation of your business.
*This product is not regulated by the New York State Department of Financial Services
Contact us to see if you qualify for a Commercial Mortgage. Email us or call us at (800)842-2910.