A Commercial Mortgage Analysis
We have all heard of residential mortgages. These are the mortgages that are easy to grasp when compared to other types. In this post, we will explain the difference and what it takes to get a commercial loan. We will also try and break down the types.
Commercial Lending applies to anything that isn’t residential
- When you are trying to run a business out of the location,n it will become a commercial property. This commercial property could be ZONED Industrial but still has a commercial component.
- A farm with crops builds a small outpost to sell those crops. This becomes a commercial building on an agricultural property.
- These examples above are the general definition of commercial property.
Multi-Residential Commercial
- This would be a multi-family (apartment building) with more than 4 units, not owner-occupied.
- A property with four units can be considered owner-occupied with a 10% down payment. You will get the residential rate.
Rates can be higher on Commercial Properties
- Commercial rates are typically higher than residential rates.
- The rates are higher, and so is the down payment in many cases.
Understanding Cap Rates regarding Commercial Properties
