Commercial Mortgages For Owner Occupied Real Estate Properties
“Even In The Midst of The Recession, There Are Still Excellent Commercial Financing Deals Available To Small Business Owners”
If you have a strong borrowing profile, there has perhaps never been a better time to finance commercial real estate. Bank mortgage deals can be found under five percent, providing a level of debt servicing that’s seldom been seen.
Stronger applications can command loan to value ratios as high as 75%, providing excellent leverage for any borrower looking to acquire a property or a business seeking to refinance an existing building.
And if you’re willing to compromise slightly on the interest rate, you can secure a commercial property mortgage that’s at or near 100% of the property value.
Commercial Term lenders that provide mortgages sometimes have a hard time competing with the Chartered Banks on interest rate, so they offset their rate disadvantage by offering higher leverage for owner occupied buildings.
The rationale from the lender’s point of view is that they are lending primarily on the strength of the business and because the building is owner occupied there isn’t a concern that a core tenant will not renew a lease or that there will be any vacancy rate cutting into the cash flows.
If the business is generating sufficient cash flows to debt service the asset, then the higher leverage on real estate provides greater access to capital at still very reasonable rates.
In some cases, term lenders have claimed to even go beyond 100%mortgage financing of the real estate under very strong borrowing conditions. While this is definitely not the norm, it does show that higher leverage, even at 80% to 95% on self occupied buildings is not only possible but very cash flow friendly.
So regardless if you’re looking for the lowest cost or the highest leverage, there are some great commercial mortgage options available to you and your business.
The key is maintaining a strong credit profile and continually producing cash flow statements year over year that support the debt servicing that would be required.
If you have a commercial property you’re considering buying or refinancing, please give me a call so I can quickly assess your situation and provide you with relevant options to consider.
Click Here To Speak With Joe Walsh, Commercial Mortgage Broker
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