Alternative Commercial Mortgage Options
“What Types Of Alternative Commercial Mortgage Options Exist In The Market?”
Alternative commercial mortgage options are going to vary considerably by region and point in time, as commercial lenders continually enter and exit the market.
And when we speak of alternative commercial mortgage options, we’re talking about pension funds, life insurance companies, hedge funds, U.S. banks, Foreign Banks, and so on.
These are alternative sources so to speak because they are out of the main stream retail marketing eye site of most people.
And while you may think that most of the business property lending in Canada is provided by the major banks and other name brand institutional lender, the alternative lending space can get close to half the market in some years.
And right now, the move is more on the rise for alternative commercial mortgage options due to the strength of the Canadian economy and for investors all over the world looking for some place to put their money where the risk of loss is more reasonable and predictable.
Commercial property financing always attracts a lot of attention, especially in the major centers due to the fact that most investors and financial institutions like land and want to hold a significant portion of their portfolio in land assets or commercial mortgage securities that are backed by land.
Compared to the residential mortgage market, there is also a greater opportunity to make money in some respects. With residential mortgages, the major banks can use home mortgages as more or less a lost leader to get greater control of the customer’s pocket book and allow them the opportunity to sell higher return items like investment securities, insurance, and so on.
Alternative commercial mortgage lenders can also have slightly different underwriting and lending criteria to what the usual suspects may offer, providing sources of funds that in some cases are easier to access and secure.
The challenge with commercial mortgage financing, as we have discussed before, is due to the large transaction size, its always going to be challenging to know who all the relevant commercial property lenders are at any give point in time. Commercial mortgage lenders must watch their portfolio’s very closely to keep them in balance, working to make sure there is never too much concentration in any one area of the market.
And because no commercial lender will ever outwardly advertise what they are currently interested, the process for finding the right lender fit can be a very hit and miss approach to say the least.
The best approach to finding alternative commercial mortgage options for a commercial property financing need you may have is to work with an experienced commercial mortgage broker who stays on top of different forms of both main stream and alternative commercial mortgage sources that are active in the market for different market segments.
Getting the assistance of a commercial mortgage professional can potentially save you considerable time and money compared with trying to figure the market out by yourself.
The good news is that at any given time, there can be several alternative commercial mortgage options for you to consider. The hard part is finding them and that’s where we come in.
About the Author Joe Walsh
I'm a Toronto Mortgage Broker that arranges mortgage solutions on residential and commercial real estate property. With over 30 years of mortgage financing experience, I'm able to quickly assess your financing requirements and provide relevant solutions for your immediate consideration. Joe Walsh Google+ YouTube Channel