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Commercial Mortgages Are Available By The Banks, Commercial Mortgage Companies And Private Lenders
Commercial mortgages are available by banks, commercial mortgage companies and private lenders. Commercial mortgage rates vary as widely as residential mortgage rates. Conventional banks offer some of the lowest rates available. However, they've restrictive lending conditions, which constrains them from making commercial mortgages for several kinds of commercial properties. Filling stations with or without convenience stores, for example, can be difficult to obtain commercial mortgages for. Commercial mortgages may also be challenging to obtain from traditional banks in the event you don't have superb personal and business credit scores.
Hard money commercial mortgages are also available through private lenders who have a lot more flexible lending criteria. Also called hard money lenders, private commercial mortgage companies focus much more the current value (today's selling price) of commercial property than on your personal financial package.
When applying for a commercial mortgage, be ready to provide your commercial mortgage company, be it a bank or a hard money private commercial mortgage lender, with the following:
- 2-3 years' taxes to you and/or your company
- 2-3 years' financial statements
- A completed conventional commercial mortgage loan application, which consists of a personal and business balance sheet
- A description of the use of proceeds of the commercial mortgage you are looking for
- A details of the property
- The existing selling price of the property or home
- The cost of improvements you will make to the property
- An estimate of the property's value when with changes
- A pay back plan for the commercial mortgage - how you'll pay this commercial back
- For a hard money bridge loan, provide an exit plan for the commercial mortgage - will you refinance this commercial mortgage with a traditional bank after creating improvements or alterations to the current property or some other scenario?
In case you are working with a private commercial mortgage company (hard money lender) be ready to show a proof of funds with your initial application. Providing reasonable proof that you are prepared to cover the closing costs and fund the difference between commercial mortgage and the complete cost of the property can make your commercial mortgage loan application move through the actions to funding a lot faster.
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