Tips for Financing a Commercial Property

As common as it might be for banks and lenders to receive applications for mortgages from first time home buyers, there is another type of customer that might require the same services; albeit for entirely different purposes. These individuals may already own their own home, or perhaps they don’t – but that’s not what they intend to use their mortgage for. In fact there’s only one other option available to those in need of this type of loan – and that’s to purchase a commercial property.

Shops, converted stores and anything in between that can be used for commercial trading can also benefit from longer term loans, such as mortgages

Although the premises will be used for a different purpose, the process of buying is much the same – and as the majority of stores will cost at least a couple of hundred thousand dollars; it makes plenty of sense to learn that banks will extend mortgages instead of regular loans to cater to these events. If you’re currently in the process of purchasing a property for your commercial needs, then here are a few tips to help with your application process.

Use a Commercial Property Mortgage Calculator

You may have heard about mortgage calculation tools online before, but did you know that there are specific ones that can be utilised for commercial residences? There’s no reason why you couldn’t use a regular one, or a modified alternative – after all, as long as the interest rates, loan amount and other important factors are as accurate as possible, you will still be provided with a precise result. It’s this amount that you can expect to pay back each month (or week).

Tell Banks What You Are in Need of

Whenever you approach a lender, they will seem keen to identify your financial potential first and foremost – but down the line, you will be expected to disclose information relating to the property that you’d like to purchase, too. There’s really no point in keeping this information back until it’s needed; instead, let your potential lender know what you are hoping to buy and you might even find that they have special deals in place to aid in the purchase of commercial properties.

Use a Mortgage Broker

One sure-fire way to find the best deals and offers on mortgages is by hiring a broker. These types of financial specialists are well-versed at comparing rates and picking from the most reputable lenders. If you choose one with plenty of experience, then they might even be able to negotiate cheaper terms with a lender and then extend these discounts for you to take advantage of. There are even some lenders that are willing to use commercial properties as leverage, or even agree to take a percentage of the businesses’ profits to reduce the cost of repayments.

The main thing to consider when buying a commercial property is whether or not you will be happy with your decision in the future. Is it in a viable position? Can it be easily accessed by potential customers? How much of a budget do you have for marketing? These are all things that you will want to think about before making a purchase.