We are a commercial mortgage broker in Toronto that can help you get the best rates for commercial mortgages and construction loans. Credit is important when you’re looking for a commercial mortgage. You’ll need to know a few things so the application process goes smoothly.
Lenders might require a higher credit score for one of these mortgages. Financing one of these properties over a residential home carries an increased risk.
- One of the reasons is simple. A business’s success depends on how well it does and not just the location. That adds a certain level of uncertainty that lenders want to address with a higher rate.
- There are a few other things you need to consider, like how a downward economic cycle can affect a commercial property. That doesn’t happen with a residential loan as directly. Commercial mortgages are more likely to default because they are tied to the economy.
- It’s not just the credit score that a commercial lender will look at. Whether you’re dealing with a traditional bank, private lender or credit union, they look at other factors like the credit utilization rate. A lower rate below 30% highlights good credit management. That makes the application likely to be approved.
- If you’re looking for an alternative loan, consider the loan-to-value ratio (LTV). Many alternative lenders look for an LTV ratio of 75%. This metric combines the amount for requested and existing mortgages and the equity in existing commercial properties.
Looking for Commercial Mortgages?
OMJ Mortgage Capital can help you arrange commercial mortgages through various financial institutions and private and alternative lenders. We work with all different types of property, and our networks have access to a good assortment of privately funded mortgage companies for most types of real estate.
