3 Things to Do Before Applying for a Commercial Mortgage
If you are here, you may already know that applying for a commercial mortgage differs from applying for a residential mortgage. Instead of financing a house, you are looking to finance a commercial property to expand your business. This means that a commercial mortgage is often larger in size and value. The rate is also variable, and commercial lenders require a larger deposit (20%-40%).
If you are planning to apply for a commercial mortgage, here are 3 pointers to keep in mind:
1. Consider the repayment plan
Repaying a commercial loan can be more challenging and trickier. They have different repayment terms, such as balloon repayments which require you to pay a large amount at the end of the term. Factor in any existing loan repayments when figuring out how much you will be repaying each month. In case of not being able to pay on time – the lender may ultimately repossess the property, which is damaging for both your credit score and business.
2. Check your credit rating.
Since commercial loans involve higher stakes, the lender looks for a stellar credit rating. If your current business credit rating is poor – you may still secure the mortgage, but it will be at much higher rates. It is better to improve your business credit score before applying for a commercial mortgage.
3. Get a commercial mortgage broker.
Since commercial mortgages are a more complicated affair, getting a broker will save you lots of effort, time, and even money. Taking the services of a commercial mortgage broker will help you navigate through the whole process if you are a resident.
They will ensure you have all the required information and even help you assess which lender is the most suitable for you. If you live in Melbourne, our team at Opulent Finance can help you take of everything from the application procedure to repayment terms.
Applying for a business loan can be slightly more complicated than getting a residential mortgage. However, we are here to help you out. At Opulent Finance, we offer commercial mortgage broker services which can help you breeze through the entire process while ensuring you get the best deal!