All About Commercial Mortgages
Here at Highline Mortgage, we are incredibly versatile. We can not only help you with your residential mortgage needs, but your commercial mortgage needs as well. If you own a business and are looking to purchase a new space or looking to refinance, we can help you with all your business' mortgage needs!
Although some people tend to apply for a residential mortgage on their own, a commercial mortgage can be much more complicated. Hiring a licensed commercial mortgage broker who is well-versed in the process, like Highline Mortgage, will eliminate all the stress from you and your business.
We can help first-time business owners apply for their first commercial mortgage, or if you are a current business owner with a mortgage, we can help you refinance or expand. Finally, if you are an investor that wants to refinance or purchase an investment property, we can help you as well!
How It Works
First, let's talk about what a commercial mortgage is. A commercial mortgage is a loan that is taken out on commercial real estate, like a storefront or shopping mall, for business use, not to live in like a residential property. With a commercial mortgage, the borrower is typically the business or company rather than an individual owner.
Commercial mortgage rates also tend to be higher than residential mortgage rates due to the increased risk. The property is used as collateral if the business misses out on mortgage repayments.
As commercial mortgages tend to be much higher to support the business' needs, the application process is more complicated and thorough than with a residential mortgage. This is where a commercial mortgage broker comes in handy! We can take all the stress away from your business and handle the entire mortgage application process, here's how we do it!
The 3-Step Prcoess
First, we will sit down and discuss your business needs. Are you purchasing real estate for the first time? Do you want to expand or refinance your current business? Do you just need an additional cash flow? Once we have a good idea of what type of mortgage product you need, we can get started.
Before applying, we will ensure that all of your necessary documents are rounded up. The paperwork needed for a commercial mortgage is much more extensive than that of a residential mortgage.
You will need to provide a lot of background on your business, including information like when your business started, what your profit has been, and proof of that with bank statements, tax returns, and details on all directors/ partners of the business. You will also need to provide personal information like a credit report, asset statement, personal statement, and a criminal record or proof of no criminal record.
We will then send your application to various lenders that meet your needs. The benefit of working with Highline Mortgage is that we work with many private lenders for commercial mortgages that you would not be able to find on your own. They often offer better interest rates for our clients than a bank would.
Once the application is sent out, it will take around two to six weeks to hear back from a lender. This is because the application process is so detailed and thorough. It is especially important to note that because lenders will take much longer to analyze your commercial mortgage application than a residential mortgage application, everything needs to be correct.
If you are missing something or filled out an application wrongly, the process will be extended. Using a commercial mortgage broker will help you ensure you are not missing anything in your application, making sure that the process is as smooth as possible, with no mistakes.
If you are a first-time business owner, the most important thing to note about commercial mortgages is that they are a big, long-term financial commitment. A loan term can vary from as short as 5 to as long as 40 years. This will be discussed with the lender beforehand to make sure the term benefits both parties.
Another important note is that your credit history plays a bigger role in commercial mortgages than residential mortgages due to the higher risk. Some lenders are likely to not approve you if you have a poor credit score.
Highline Mortgage can help you compile a detailed business plan to show lenders that your business is a good investment. We have an extensive list of reliable lenders, so we will try our best to find one that suits your needs and conditions.
If you're wondering whether to apply for a commercial or residential mortgage, the difference is simple. If you plan to make money through using a property, you will need a commercial mortgage. You can get one for a variety of buildings, including apartments, hotels, industrial buildings, shopping malls, office units, and retail plazas. You can also use the space for mixed-use, meaning you can still live in a commercial building. For example, if your storefront has an apartment above, you can live there.
Highline Mortgage is here for you throughout the entire commercial mortgage application. Don't stress over all the small details when we can sort them out for you!