Finding the Right Commercial Mortgages Helps You to Meet Your Financing Needsby Stacey Galvin consultant
apply for a commercial loan, you may work with direct commercial
mortgage lenders or choose to approach a
mortgage broker. A broker is an intermediary who brings together a
lender and a borrower. It is important to understand that brokers are
not authorized to provide the final loan approval, but are there to
consult you on your options.
not authorized to disburse money. Based on the requirement of the
loan, mortgage brokers in the USA generally originate and process
different types of commercial loans. They charge brokerage
representation fees in exchange for originating and processing
commercial loans from the borrowers. The borrowers can visit a
mortgage broker website
to know more about the brokerage fees, benefits, advantages, and
other financial/mortgage services rendered by them.
A loan that
is used to purchase or renovate an owner-occupied or tenant occupied
commercial property is known as commercial real estate loan.
Commercial properties such as mixed-use buildings, retail centers and
office buildings can be purchased or renovated using a commercial
real estate mortgage. Some of the common types of loans available to
the commercial investors in the USA are: permanent loans, bridge
loans, commercial construction loans, take out loans, conduit loans,
SBA loans, SBA 7(a) loans, and fix & flip loans.
commercial loans in the USA
loans are availed from traditional lending agencies such as banks and
other conventional lenders. The loan must have some amortization and
a term of at least five years, to qualify for a permanent loan. As
compared to bridge loans, the rate of interest is low in permanent
loans. Permanent loans have long and rigid documentation and approval
can’t qualify for permanent loans from reliable lenders such as
bank can apply for bridge loan to meet their short-term financing
needs. It’s a short-term loan that is typically taken by the
commercial investor for a short period of time, ranging from 6 months
to 3 years pending the arrangement of larger or longer-term
financing. Bridge loans are typically more expensive than
conventional financing, to compensate for the additional risk. It has
a higher rate of interest but easy approval process.
construction loans are used by the investors in the USA for the
purpose of building a commercial property. In order to make sure they
are only used in the construction of the new building, the loan
proceeds are controlled by the lender.
It is a
large permanent loan on a standard type of commercial property that
is underwritten to secondary market guidelines and has a 12-36 month
soft pre-pay. Interest rates for conduit loans are lower compared to
It’s a renovation loan that is similar to construction loans. To carry out renovation on a commercial property for quick sale, fix and flip loans are used by the borrowers and real estate investors in the USA.
Created on Nov 8th 2017 06:42. Viewed 358 times.