Commercial mortgage loans are term loans used specifically to finance or refinance commercial real estate. These properties may be owner-occupied (used for your own business) or income-producing investment properties (like retail centers, office buildings, or apartment complexes).
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Underwriting and analysis vary based on the property type, but commercial mortgages typically offer:
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Longer amortization periods
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Competitive loan-to-value (LTV) ratios
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Attractive interest rates
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Flexible loan terms
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Compared to other commercial loan products, commercial mortgages often provide more favorable structures tailored to real estate investments.
How do Commercial Mortgage Loans Work?
Commercial lenders evaluate both the property and the borrower/investor to determine eligibility. For owner-occupied properties, lenders may assess your business’s financial health. For investment properties, underwriting often focuses on projected income, tenant leases, and market conditions.
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Though the loan process is similar to residential loans involving an application, underwriting, and closing commercial mortgages typically require:
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More documentation (rent rolls, operating statements, appraisals, etc.)
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Larger down payments
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Deeper analysis of property performance
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Common Uses for Commercial Mortgage Loans:
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Purchasing office, retail, industrial, or mixed-use properties
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Refinancing existing commercial real estate debt
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Acquiring multi-family investment properties
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Expanding or relocating business operations