Category Archives for Commercial Mortgage
Hamilton Commercial Property Mortgage
“Hamilton Commercial Property Mortgages Can Apply To a Wide Variety of Real Estate Properties”
A Hamilton commercial property mortgage is essentially a real estate mortgage on any property other than a residential property under 5 total units.
This covers a very broad spectrum of real estate to say the least with a broad cross section of mortgage lenders and commercial lending programs that may or may not apply to your particular mortgage requirements.
Because the unique nature of many commercial properties, lenders can become very specialized in terms of the types of properties and structures they will consider, the size of the mortgage required, the credit profile of the borrower and so on.
Compared to residential mortgage financing where the differences between mortgage programs can be very subtle, the commercial lending programs can be quite different in terms of what they fund and how to qualify.
Commercial mortgage qualifying can be a very lengthy process, especially if third party appraisals and environmental assessments are required. Even if you take the initiative and get these reports completed ahead of time, they may not be on a mortgage lender’s approved supplier list, causing you to go elsewhere with your mortgage requirements, or to have to get the reports and work redone.
The commercial financing process can be very frustrating and hard to solve, especially if you have any type of time pressure you’re dealing with to get funds in place.
That’s why its always a good idea to work with a Hamilton commercial property mortgage broker so that you’re not wasting time and money on a commercial mortgage lender who either is not a good fit for your requirements or is going to take far longer to issue a commitment and fund than the time you have available to work with.
I also have very good access to private mortgage lenders that will finance commercial real estate. This is becoming a more popular option for getting a commercial mortgage in place faster in order to beat the clock on an offer to purchase and then allow time after the fact to get a long term institutional mortgage in place.
For solid commercial properties, there is also very good rates in the market from private mortgage lenders that at times can come close to institutional rates on certain properties in certain areas.
If you have a Hamilton commercial property mortgage requirement, I suggest that you give me a call so we can quickly go over your situation and provide relevant commercial mortgage options for your consideration.
Click Here To Speak With Hamilton Commercial Mortgage Broker Joe Walsh
Ottawa Commercial Mortgages
“Here’s Where To Get A Better Understanding of Your Ottawa Commercial Mortgage Options”
Ottawa commercial mortgage loan financing is available from a large number of private and institutional lending sources. This would appear to be a major advantage to a business owner trying to secure a mortgage on a commercial property, but the reality is that because there is such a vast array of commercial property types, each with their own effective market dynamics, commercial lenders tend to specialize their mortgage programs to only consider properties in certain geographies, industries, building structures, and so on.
So it can become difficult not only finding the commercial real estate lenders that are most relevant to your particular requirements, but also difficult determining which lender will be able to provide the best rates and terms at any given time.
This last point is important in that commercial real estate programs are also very much a moving target as well with the interest level in certain properties potentially changing on a regular basis. This is due to the constant changes that can occur within a lender portfolio in terms of new loans added and existing loans going into default or expressing higher risk levels. In order to maintain the proper risk balance, the commercial mortgage financing programs are regularly adjusted so that new approvals will reduce the overall risk of the lender’s portfolio or at least keep it in balance.
The best way to try and understand the shifting sands of the commercial mortgage loan market at any given time is to work with an experienced mortgage broker who stays on top of the industry and lender trends for your area.
The right mortgage broker can get you working with Ottawa commercial lenders more relevant to your particular situation that much sooner, getting the transaction or internal financing requirement in place and funded in the time you have to work with.
Trying to figure this out on your own can not only be an exhaustive and many times fruitless process, but it can also waste valuable time that could put a deal at risk or the business’s financial cash flow in a precarious position.
If you need an Ottawa commercial mortgage for a real estate property you own or wish to acquire, I recommend that you give me a call so I can quickly assess your requirements and work with you to locate and secure the best available options.
Mortgage Leverage Strategies
“Here’s One Way To Get Greater Mortgage Leverage on a Commercial Property At Lower Average Interest Rates”
There is typically a trade off between lower interest rates and higher mortgage loan to value ratios, especially with short term deals.
One of the ways to get the best of both worlds is to secure a combination of institutional and private mortgage facilities for the subject property in question.
As an example, say that you have a condominium project you’re selling off unit by unit and you’re looking for the maximum amount of condo inventory financing you can secure on the available units. An institutional commercial lender may be very interested in your project at very good rates, but likely at a loan to value ratio between 50% and 65%. If the development has already sold a number of units and has a strong marketing campaign underway, a private second mortgage may be able to be arranged for up to 80% loan to value depending on the project.
While the private second mortgage is going to be more expensive in terms of rate, the principal the rate will be applied to will be small percentage of the institutional financing, allowing for the weighted average cost of capital to still be respectable while gaining the highest potential loan to value.
This strategy works for a variety of reasons. First, the private is not taking a huge position in the project, making it more likely that a private lender would be interested in the deal. Second, as each condo unit is sold, most of the sale price will go to reduce the mortgage principal on one or both mortgages, further reducing the exposure to the lenders as time goes along. Third, the institutional lender is comfortable with a second mortgage holder being in place due to the accelerated pay down of the project.
The key to making it work is working with a mortgage broker that can arrange both the institutional and bank portions and get everything approved and disbursed in the time period required.
If you want to look at different strategies to get the best potential rate and leverage on a real estate property, please give me a call so we can go through your requirements and see what types of workable mortgage options can be arranged.
Kitchener Commercial Mortgage Financing
“Let Us Help You Locate and Secure Kitchener Commercial Mortgage Financing”
Kitchener commercial mortgage financing options can be considerable, depending on the type of commercial real estate property you are trying to get financed.
There is a wide variety of bank, institutional, and private mortgage financing sources that could potential be a good fit for the financing you’re trying to get into place.
The key to locating and securing the best available deal for any property you’re trying to finance is to work with an experienced commercial mortgage broker or commercial specialist that has well established lender relationships in the Kitchener and surrounding area.
This is important for a number of reasons. First, different lenders will have a different appetite for different types of property, loan size, etc. And their interest in any slice of the market can constantly change, depending on what’s going on in their portfolio. So its important to be working with someone who understands who is financing what at any given point in time.
Second, the commercial market has become more competitive in the mid market area with private mortgage lenders now providing short term competition to some of the second tier banks on certain deals. This development is not widely known by most business and property owners and without the services of a commercial mortgage broker its unlikely they will come across all the available options as most private lending sources only work through mortgage brokers.
Third, the commercial mortgage process from application through to completion can be grueling to say the least so its important that you are focusing your efforts on the most likely lending candidates for your deal otherwise you can literally be wasting months of time and effort by trying to work with a less likely lending source.
Fourth, there can be considerable rate differences on the market for a particular deal, so its important to understand who is going to be a better overall fit for your property financing requirements in order to pay the lowest potential rate.
If you have a Kitchener commercial real estate financing requirement for acquisition, property refinancing, debt consolidation, or commercial construction financing, I suggest that you give me a call so I can quickly assess your requirements and provide relevant commercial mortgage financing options for your consideration.
Click Here To Speak With Kitchener Commercial Mortgage Broker Joe Walsh.
Brampton Commercial Mortgage Financing
“We Help our Clients Locate and Secure Brampton Commercial Mortgage Financing”
Brampton commercial mortgage financing is available through a number of different mortgage lending sources including banks, institutional, and private mortgage lenders.
One of the most challenging things about commercial mortgage financing is that every piece of commercial real estate is somewhat unique in terms of its value, use, age of building, zoning, etc. As a result, the commercial financing application can also end up being fairly customized as mortgage lenders, especially banks and institutional lenders, will have different appetites for different deals.
Another current challenge with trying to locate Brampton commercial mortgage financing these days is that the traditional mortgage lenders are taking a very conservative approach to the market and taking their time to arrive at lending decisions.
Because of the impacts of the recent recession, business mortgage lenders remain cautious overall, but are still very aggressive on the “A” deals. This has created increased opportunity for private mortgage lenders that like to invest in commercial property. Because of the conservative stance taken by most institutional lenders, private lenders are getting a better quality deal on average than they would historically seen, which has also increased competition among private in some areas, bringing the cost of financing down.
What this all means is that for many commercial real estate properties, the cost of borrowing between institutional and private lenders has narrowed considerably in some areas, making private mortgages more of an option both in terms of availability and affordability.
For the most part, private mortgages are a short term solution of one or two year duration. But if you’re on a tight time line and need to get something done sooner than later, then commercial private mortgage financing options are a good consideration.
Fortunately, we have very strong relationships with Brampton commercial mortgage financing lenders in both the institutional and private lender categories. We also work on a wide variety of commercial real estate mortgage requests including those involving construction loan requirements.
If you’re in need of Brampton commercial mortgage financing, I suggest that you give me a call so I can quickly assess your options and provide you with relevant commercial mortgage loan options for your consideration.
Click Here To Speak To Brampton Commercial Mortgage Broker Joe Walsh
Mississauga Commercial Mortgage Financing
“Mississauga Commercial Mortgage Financing Can Cover a Lot of Different Real Estate Property Applications”
Mississauga commercial mortgage financing basically covers off all types of real estate mortgage lending that does not involve residential occupancy of less than 5 unit facilities.
So while residential real estate mortgages are by far the largest in sheer numbers, the different types of commercial mortgage applications is almost limitless as there are so many different types of structures that fall into this catchall category.
Add to the property diversity the lender diversity and you can have a fairly complex landscape to try and navigate.
Let me explain.
Because commercial properties can contain somewhat unique characteristics to their use, it can be hard to find commercial lenders that can fund the deal, at least not for the terms and conditions you may be interested in.
The other side of the equation is that commercial lenders also tend to be niche focused, so each category of commercial property can have different mortgage lending programs and even different Mississauga commercial mortgage lenders to consider.
Taking it one step further, you also will have to consider bank or institutional commercial property lenders versus private mortgage lenders.
On the surface, a commercial mortgage issued by a bank will provide a cheaper rate so in most cases would be preferred as everyone wants the lowest cost form of money. But the cheaper money is not always the best fit, especially if you’re in a hurry or have had any near term financing challenges in your business.
And one of the great benefits of Mississauga commercial mortgage financing is that there is a good presence of both institutional and private mortgage lenders in the area, which can provide several different types of options for most property types.
Lower cost sources of commercial mortgage loans will require more third party verification of financial statements, property values, and property conditions, which does add to the all in cost of financing.
Commercial mortgages issued by private lenders may end up costing a bit more and have a shorter term, but they are more ideal for managing acquisition time lines or bridge financing scenarios.
Regardless of the size or type of the Mississauga commercial mortgage financing you require, your best approach is going to be to work with a commercial mortgage broker that has strong lender relationship with both bank and institutional lenders in the Mississauga area.
Click Here To Speak Directly With Mississauga Commercial Mortgage Broker Joe Walsh
Commercial Real Estate Mortgage Financing Dilemma
“When You Have Two Potential Commercial Real Estate Mortgage Offers, Which One Do You Choose?”
The dilemma with commercial real estate mortgage financing is which lender to pick and which offer to go with, assuming you have more than one offer for commercial mortgage financing to consider.
Or if you have an offer in hand, do you try and locate a better offer before making a commitment?
I say that this is a dilemma in that assuming you have a decent piece of property to finance and an even ok financing profile, there are going to be lenders who are going to be interested in providing you with mortgage financing.
The challenge is not getting someone interested. The challenge is getting the deal funded and funded in the time you have to work with.
What most business owners don’t realize is that no matter how large the lender, or how well the application process has gone so far, or how good the term sheet or even commitment contract sounds, the financing process isn’t over until its over.
Its hardly uncommon for deals to fall apart after all the commitment documents have been signed, when the finish line is already in sight. This type of result can be devastating in a number of ways, most of which are financial.
So when trying to decide on which option to pick here are some things to consider.
First, identify an acceptable range of rates and terms. If anything falls within the range, then it needs to be seriously considered.
Second, if you’re starting to get pressed for time, and have an option in the acceptable range, you need to seriously be considering accepting it, especially if its well along in the due diligence process. Many times, the best deal is the deal that can get funded in the time you have, provided it falls within your acceptable range.
Third, lender reputation for getting a certain type of deal in terms of size, location, and industry funded can carry a lot of weight and should be strongly factored into the decision making process versus being overly fixated on the lowest cost offer from a commercial loan provider who hasn’t placed a similar deal in several years or ever.
The best way to not only pick the best commercial real estate financing option, but make sure that the process to funding is well managed, is to work with an experienced commercial mortgage broker.
Commercial Mortgage Refinancing
“Toronto Commercial Mortgage Refinancing Can Be More Challenging Than You Think”
Unlike residential mortgage refinancing scenarios, Toronto commercial mortgage refinancing situations are not as subject to automatic or near automatic renewals and in fact, its not unusual for commercial lenders to pull in and out of markets according to a number of different factors including the strength of the overall economy, strength of the specific industry paying the bills, and strength of their portfolio.
Plus commercial property mortgages come with more strings including operating statement covenants that if broached can lead to a timely demand for mortgage repayment at renewal time.
Even if you never missed a payment during the interest period, stayed completely on side with your covenants, and were an upstanding borrower all the way through, you still could be served with a payout statement a few months before your mortgage term comes due.
This may not be all bad in that you could end up with an even better mortgage in terms of rates and fees with another commercial mortgage lender. But the grief that you may need to go through to get the mortgage relocated can be considerable. If you are offside with some of the mortgage conditions, then it may be that much more difficult to move to another lender without having to pay a higher rate of interest,
The larger the commercial funding amount, the more stringent the requirements are going to be with a new lender. Things like environmental regulations are constantly evolving. What was acceptable on your site at the time the current mortgage was issued may not be accept now. The environmental standard being applied at a given time can also vary from one bank or institutional lender to another.
There are two things you can do to increase the probability that your long term property financing needs don’t get derailed expectantly.
First, assume nothing and start early. Make sure that all the information you will be expected to provide for the existing mortgage holder, or an alternative, is up to date 6 months before the end of the mortgage term so that all your potential options can be considered.
Second, work with a commercial mortgage broker that can provide you with the market insight that can be hard to come by when you’re not at least knee deep in the Toronto mortgage refinancing market on a daily basis.
Click Here to Speak With Toronto Commercial Mortgage Broker Joe Walsh
Commercial Land Lending
“Here’s How To Locate And Secure Commercial Land Lending in The Greater Toronto and Surrounding Area”
Toronto commercial land lending can fall under a number of categories. There can be the acquisition of bare land for development or speculation; land with existing buildings that are going to be removed for new construction, or land that has already had some site development that is being provided in a semi prepared state for sale to other builders or developers.
In all cases, the objective is to secure commercial land, or land that is zoned for a commercial use now or in the future.
One of the key factors in any Toronto commercial land lending is the prior use of the property. Previous commercial or industrial use could have created environmental liability that will need to be understood through third party environmental assessments before a mortgage lender of virtually and type will consider issuing a commitment to finance. The less previous use that could generate environmental contamination, the more likely that commercial land lending can be perfected.
Another key factor for Toronto commercial land lending is the local market where the property resides. The market value and ongoing market activity for related properties in the area will have a direct impact on lender interest, mortgage rates, and mortgage loan to property value ratios.
Both of these factors will be considered together to determine commercial lending interest. For instance, a bare land property that was previously used for agricultural purposes will likely have no environmental liability concerns, but if the property is not located in or immediately adjacent to an active commercial development, the market resale value for the commercial land will not likely be very strong.
Both institutional and private mortgage lenders can provide commercial land lending to their clients. For bank or institutional mortgage lenders, there will be more of a focus on where the source of loan repayment is going to be coming from. For non bank mortgage lenders, there will be a greater focus on the exit strategy to pay back the mortgage at the end of the interest term.
Toronto commercial land lending mortgages can range from 50% of the appraised market value to as high as 75%, depending on the property and its market area location.
If you require a commercial land lending facility in or around the Greater Toronto Area, please give me a call so I can quickly assess your situation and provide relevant commercial land lending options for your consideration.
Commercial Real Estate Financing
“Toronto Commercial Real Estate Financing Can Come In Many Different Forms”
The Toronto commercial real estate financing market is becoming more and more interesting these days in a number of ways.
First, there is tremendous competition among banks and institutional lenders for what we can “A” deals with the strongest getting access to some incredible rates.
At the same time, its also not hard for a pretty good deal (or at least one that would be considered as such just a few years ago) to fall into the secondary bank and term lender financing rate categories. These are still great rates in the current market, but typically one or two percentage points above the very best rates out there.
What’s probably most surprising in Toronto commercial real estate financing these days is the amount of private mortgage money floating around and the types of rates being offered. In many cases, private lenders are competing directly with secondary banks and term lenders for commercial real estate mortgage financing deals.
On larger deals, private mortgage financing can get as low as 6% per year which is a rate level that has rarely been seen if ever in recent history on private money.
Part of the reason for some of the lower rates available through private lenders is that many privates are being more cautious about where they put there money these days. The stock market has not inspired much confidence in over a decade and the residential mortgage market for sub prime lending is still viewed to be pretty risky.
So many privates that have available money are looking to sink it into good solid commercial properties where the loan to value ratios are no higher than 60%.
And because of the more conservative approach being taken in lending in general by banks and institutional lenders, there are more of these types of deals available for private lenders to consider as well.
Keep in mind to that its not all about interest rate. Many business owners and property owners have seen less than stellar operating results during the last two years and as a result they may not qualify for conventional bank financing. With private mortgages also offering short terms with open buyouts, there isn’t much of a drop off when forced to go down market.
The bottom line here is that, depending on your location and the nature of a piece of Toronto commercial real estate property, there can be several different options to consider.
Toronto Commercial Mortgage
“We provide Toronto Commercial Mortgage Financing For a Wide Variety of Projects and Funding Amounts”
A Toronto commercial mortgage can be required for an extremely broad spectrum of real estate property applications.
Even though there are far fewer commercial real estate loans issued each year compared to residential mortgage, the number of different types of commercial mortgage requests covers a lot of ground.
Some of the more common commercial mortgage financing applications include:
- Multi Family Unit buildings
- Apartment Building Financing
- Strip Mall Financing
- Mixed Use Building and Property Financing
- Condo Development Financing
- Construction Financing
- Warehouse Mortgage Financing
- Townhouse Development
- Subdivision Mortgage Financing
- Self Storage Commercial Mortgage Financing
- Income Property Mortgage Financing
- Office Building Financing
- Land Acquisition Mortgage
- Land Servicing Financing
- Bridge Loan Financing
Put another way, anything that is not a residential property by definition is basically a commercial property requiring commercial mortgage financing.
The main difference between residential mortgage programs and commercial mortgage programs is the risk associated to each by a Toronto commercial mortgage lender.
For commercial property loans, can be increased over residential for a number of factors including size of loan, location, and the resale market for the subject property in question.
While residential properties can be sold fairly quickly, commercial properties can be on the market months and even years before they can be liquidated. For a commercial mortgage lender that is in a foreclosure position, it can take a long time to recover the outstanding mortgage principal and can have significant operating costs involved in getting to a final sale.
In order to manage commercial mortgage risk, mortgage programs tend to focus on very narrow slices of the market so internal expertise can be developed on a particular type of property. As a result, there are numerous commercial mortgage programs on the market, many within the same company, each geared towards the requirements of a specific type of commercial real estate.
To locate and secure the right Toronto commercial mortgage lender that best fits your requirements at a given point of time can be daunting task. The best way to zero in on the most relevant sources and spend your time trying to secure mortgage programs that will best serve your needs is to work through an experienced Toronto mortgage broker who understands the local Toronto market and has well established relationships will a broad cross section of lenders.
If you have a Toronto commercial mortgage financing requirement, I recommend that you give me a call so we can go over your requirements together and discuss potential commercial mortgage options that would best meet your business needs.
Click Here To Speak Directly To Toronto Commercial Mortgage Broker Joe Walsh
Commercial Property Financing Challenges
“Key Things To Consider When Seeking Commercial Property Financing These Days”
At the time of writing, we are in the middle of 2010 and the recent recession continues to play havoc with the capital markets.
From a commercial property financing point of view, it has produced a bit of an odd mix.
On the one hand there is hyper competition for the grade A deals as large commercial property investments will always be a sought after asset for any major lender’s portfolio.
On the other hand, commercial property mortgage financing deals that are just the slightest bit off in certain lender assessment areas are having a hard time getting bank or institutional mortgage commitments in place.
Even for the better deals, the turn around time from application to funding can be several months as lenders work hard to avoid making any financing mistakes. This has resulted in more detailed assessments, more third party verifications, more of just about everything.
The net results are 1) it can be hard to tell who will fund your deal if its not Grade A quality, and 2) its hard to know how long the funding process will take.
This has increases both the supply and demand for private mortgage or non institutional lender financing for commercial properties where borrowers are prepared to pay a little higher interest rate in order to just get the deal closed, get the old mortgage paid out, or secure additional working capital for their business.
Private mortgage financing options also tend to be short term in nature, providing the property owner with the opportunity to continue pursuing a longer term bank or institutional lender solution that will eventually pay out the private financing arrangement.
The hard reality for many commercial property owners is that the path to ideal long term mortgage financing can be a two step process where a short term private mortgage instrument is required in the near term to provide the capital and time required to figure out a longer term commercial property financing option.
This of course leads to additional costs that anyone would want to avoid. But if its either the two step or no step option, paying a bit more through multiple mortgage options in a relatively short period of time is something that has to be seriously considered, at least until the capital markets settle down and things become more predictable.
What Exactly Is a Commercial Mortgage Broker Anyway?
“Is There Any Real Difference Between a Residential Mortgage Broker And a Commercial Mortgage Broker or Commercial Mortgage Specialist?”
This is a question I get asked every once in awhile.
Is there really any difference between mortgage brokers that work on residential versus commercial properties.
From a licensing and regulatory qualification point of view, there really isn’t. All mortgage brokers, regardless of the areas of the mortgage market they choose to focus on, will have the same basic training and qualifications.
The real difference lies in their chosen area of focus and the experience they gain from focusing more on commercial properties versus residential properties.
Taking it one step further, while residential mortgages are by far the larger of the two in terms of shear numbers of mortgage issued each year, residential mortgage programs tend to be much more similar than their commercial mortgage counter parts.
In the world of real estate mortgages, there basically is residential mortgages and everything else which is thrown into commercial. And each of the different types of commercial real estate applications has its own lending requirement, lender programs, and even unique lenders that specialize in that particular type of commercial building in a particular location.
So not only are there many potential different facets of the commercial mortgage market, each can have its own unique requirements, and on average, commercial deals have more requirements than residential mortgages.
So, yes, there is such a thing as a commercial mortgage broker. But if you want to get the best level of service from these professionals you need to take it one step further and zero in on commercial mortgage brokers that frequently work on mortgage applications similar to your commercial property financing requirement.
Each slice of the market is going to have its own set of lending requirements, lender relationships, best practices, industry standards, and so on. The more a mortgage broker is focused in on your type of property the more likely they are going to be able to provide you with the best possible service and results.
If you have a commercial property that requires commercial mortgage financing, give me a call so I can quickly assess your requirements and provide relevant solutions that we can go through together.
Click Here To Speak With Commercial Mortgage Broker Joe Walsh
Commercial Mortgage Financing Is Another Kettle of Fish
“If You’re Looking For a Commercial Mortgage, Just Remember That It’s Not Going To Be The Same As Arranging a Mortgage For Your House”
It doesn’t always have to be hard, but on average, a commercial real estate mortgage is much more difficult to get into place than a residential mortgage. There are a number of reasons why this is the case.
First, commercial properties, on average, carry larger acquisition price tags, so lenders are naturally going to be more cautious before they start writing bigger checks.
Second, the resale market for commercial properties in most situations is less active and less predictable than a comparable residential market area. If a mortgage goes into foreclosure, the lender may have to sit on the real estate for an extended period of time and the longer it sits, the more it can drop in value, making it hard to get the loan repaid.
Third, residential mortgage repayment assessments are mostly based on borrower wages and reported taxable income which is pretty easy to verify and get comfortable with. Residential mortgage even go one step further and have standardized debt servicing ratios that are based on significant statistical data. Commercial mortgages on the other hand are based on profit and loss statements which can vary considerably from one business to another, making it difficult for commercial mortgage lenders to quickly and comfortably assess the repayment potential of the borrowing entity.
Fourth, most commercial real estate now require environmental assessments before lenders will finalize a commitment to fund. These assessments can not only be costly, but can drag on and on if lab testing of soil and water are required. If any environmental issues are identified, then the applicant is going to have to clean it up, prove that the clean up was done correctly, and potentially get a further environmental assessment before a commercial mortgage can be secured.
Fifth, commercial appraisals are much more involved and costly than the residential property equivalent. And because there are less appraisers qualified for commercial work, which also take longer to complete, it can take weeks and even months to get a commercial appraisal completed at certain times in certain areas where there is a lot of appraisal demand.
Sixth, mortgage brokers that focus on residential mortgages may not be a lot of help with your commercial mortgage application as they don’t regularly deal with the different lenders and their requirements.
Click Here To Speak Directly To Commercial Mortgage Broker Joe Walsh
Commercial Mortgage Rates Becoming More Competitive In The Middle
“Mortgage Rates On Commercial Properties For Mid Market Deals Have Become More Competitive”
While the best commercial mortgage rates come from the major banks, the process for getting anything approved these days from big bank type lenders can be an exhausting process to say the least. As a result, more and more business owners are moving to the mid market commercial property financing programs which are slightly more expensive, but not quite as elusive to secure at the moment.
What also makes things more interesting in the middle is the increase in private lender funds that are available. Many private mortgage lenders prefer commercial properties, especially with well established companies, as they can place larger amounts of their available funds more quickly versus the intensive process of placing lots of smaller amounts. And because of the amount of private mortgage funds available, the first position commercial rates can get as low as 6%, bringing private funds right into the range of mid market institutional lenders.
For deal sizes at or above $1.0 M, the lender fees due on closing or commitment can be quite similar as well depending on the property and location, making the overall financing packages very comparable.
For companies that require financing at minimal repayment burden on cash flow, the interest only requirements of many private lenders can be preferred. But there are also private lenders that will consider amortized repayment as well, once again providing borrowers with additional choices.
Commercial private mortgage can still shoot up to over 10% on more challenging properties. But for the solid commercial deal, especially ones where there is tenant revenues in place, the rates and fees can easily rival traditional options outside of the big banks.
And because the mid market institutional lenders are also after these types of prime lending opportunities, the competition on rates and terms high, providing considerable options to business owners in many cases.
Just remember that these flexibility and choices come with a rate trade off. Big bank financing is always going to be cheaper, but do you have time to go through all the hoops to get the financing, and will you desire more flexibility down the road in terms of repayment?
If you have a commercial property that requires financing, please give me a call so I can quickly assess your requirements and provide relevant options for your consideration.