A commercial mortgage is a mortgage loan granted to different types of businesses secured by commercial property. Commercial loans are available for both owner-occupied and investor properties, including office buildings, shopping centers, industrial warehouses, or apartment complexes. Borrowers can have up to 90% commercial financing and unlimited cash-out options. The proceeds from a commercial mortgage are typically used to acquire, refinance, or redevelop commercial property.
Vs. Recourse Loans
When getting a commercial mortgage consider a nonrecourse loan. A non-recourse commercial mortgage can become very beneficial in certain situations. For example, in the event of a default with a nonrecourse loan, the bank can only take back the property. If you still owe more money than the property is worth, you will not have to pay any more. Contrastingly, with a recourse loan, the bank can come after you for any deficiency balance.
Fixed-Rate Mortgage Loans
Vs. Adjustable-Rate Mortgage Loans
Another important decision you will make when obtaining your commercial mortgage is whether to get a fixed-rate or adjustable-rate mortgage. With a fixed-rate mortgage, the interest rate and monthly payment stay the same for the entire life of the loan. This may be appealing if you want certainty in your monthly payments. On the other hand, an adjustable-rate mortgage (ARM) has an interest rate that can change over time. This could be helpful if you think interest rates will go down in the future, but you should be aware that your monthly payments could also increase.
Balloon Mortgage Loans
A balloon mortgage is a commercial loan where the principal is repaid in one lump sum at the end of the term. This type of loan can be helpful if you know you will be able to pay it off in a shorter amount of time or want to take advantage of a lower interest rate. However, keep in mind that if you are not able to pay off the balloon mortgage in full, you will likely have to refinance or take out a new loan.
Interest-Only Mortgage Loans
An interest-only mortgage is a loan where you only pay the interest on the principal for a set period of time, usually five to ten years. At the end of the interest-only period, the loan will amortize, or repay, the principal over the remaining term. This type of loan can be helpful if you want more flexibility in your monthly payments or think you will be able to pay off the principal before the interest-only period ends.
and how we can help you get the financing you need for your business! Express Financial Services Group offers a wide variety of commercial loan products, including but not limited to, non-recourse loans, recourse loans, fixed-rate mortgages, adjustable-rate mortgages, balloon mortgages, and interest-only mortgages. We are here to make the process as easy as possible for you,