Every commercial mortgage in Canada has a unique set of rates and repayment conditions, much like residential mortgages. Each commercial or company lender also has a unique way of determining which clients are eligible for borrowing.
However, before applying for any type of mortgage, you should be aware of the key differences between commercial and residential mortgages, according to G.S. Mann, one of the top Mortgage Brokers Calgary NE.
Among them are, but not restricted to:
Your ability to obtain a house loan depends on a variety of factors, including your personal income, credit rating, and current debts. Specific permission criteria are rarely stated because approval is dependent on the property you want to acquire.
2. Down Payments
More money must often be put down on business mortgages than on residential mortgages. For example, a down payment of about 25% is needed for commercial, office, or retail properties, but more like 35% is needed for industrial sectors. (Up until the loan is repaid, the lender finances the balance.)
3. Interest Rates
Despite their potential high worth, mortgage brokers in Calgary NE claim that commercial properties may be significantly more expensive than residential structures and as such constitute a bigger risk to the lender. Higher interest rates will thus be applicable, particularly if the company’s corporate credit rating or anticipated revenue is poor.
4. Processing Time
Most commercial mortgages complete in 6 to 12 weeks, although some residential mortgages can close in as little as 4 weeks (although 90 days is not unusual).
5. Processing Costs
Commercial mortgages cost more to complete than residential mortgages because they need more time and documentation. For instance, an environmental study may cost $2,000 and a property assessment $3,000, respectively. You could also want to get in touch with a real estate agent or attorney.
Overall, these clearly the key differences between a residential mortgage and a commercial mortgage as per the best of the best Mortgage Brokers Calgary NE.