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.
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