4 Qualities to Look For in a Commercial Mortgage
10 Jun 2020
It’s time to find a bigger place for your business operation. The idea of leasing space doesn’t fit into your plans. That means you will need to purchase a new building. A good way to get started is to talk with Clover professional brokers offering commercial building mortgage financing. During those talks, make sure that the following four qualities are included in any offer that you consider.
A Lower Deposit or Down Payments
Pay close attention to the deposit or down payment that you will have to make. The goal is to not use all of your operational capital in order to make the down payment. This strategy makes it easier to maintain a nest egg that you can draw on for equipment upgrades, marketing campaigns, or even to manage the mortgage for a few months if the business experiences some unanticipated downtime.
Reasonable Interest Rates
The rate of interest that you pay on the mortgage is also important. Even a minor difference between the rates on various offers can add up over time. The amount of money that you save by projecting the total cost of a mortgage offer with a different one with a similar duration could be enough to do something great for the business proper.
Remember that it’s not just about the rate itself. Find out how the rate is applied to the balance. Even something that seems minor, like whether the lender uses a 360 or a 365 day year to calculate the interest, can make a huge difference in what you ultimately repay.
A Clear Schedule of All Fees and Charges
The last thing that you need are surprises with mortgage fees and charges. It’s usually easy to identify the fees that apply at the onset of the mortgage. What may not be quite as clear is charges that apply later on and only appear on the statements.
The only way to ensure you know all the charges and fees is to read through the loan contract thoroughly. If something that seems to authorize a fee is found and you don’t quite understand how and when it would be assessed, get clarification from the lender before signing anything.
Shorter Processing Times
There are lenders out there who will offer commercial mortgages and proclaim that the approved loans are processed in as little time as thirty calendar days. Note that this sort of promise does not commit the lender to processing the loan by the thirty-day mark. In some instances, the lender may take several months to complete the processing.
When you look at loan processing times, get a firm commitment. There is no reason why you should tell the property seller that the loan will go through by a certain date and then not have that happen. Rest assured there are lenders out there who will provide realistic dates rather than make vague promises that are more marketing hype than fact.
Today is the ideal time to talk with the Clovermortgage.ca brokers in Toronto and begin the search for the commercial mortgage loan that you need. Go over every detail and make sure there is no misunderstanding about the commitment you’re making or what the lender will provide in return. With the right amount of diligence, that loan will serve you well from beginning to end.