What is a commercial mortgage?
The term “commercial mortgage” often refers to a loan for the purchase of any real estate for subsequent income. For example, when an apartment is purchased for resale or rental purposes. We will refer to commercial mortgages as a form of credit for the purchase of non-residential real estate used for commercial purposes. Such objects include production, storage, office, shopping and entertainment, and other buildings, the premises located in them, and the land underneath them. Pledge can be pledged both for the real estate acquired and the one already owned by the borrower. Commercial mortgages are available to all categories of borrowers – individuals, legal entities, and individual entrepreneurs.
If the plot is leased, the right to lease it becomes a pledge. The right of permanent use of a plot is not pledged, but it may be subject to foreclosure. If a mortgage is taken out on a property complex, the subject of the mortgage is not only the real estate object(s) and land plot(s) but also other assets. These include equipment, source materials, finished products, rights of claim, and exclusive rights.
Peculiarities of commercial mortgages:
Non-residential real estate, as opposed to residential real estate, has specific features, which, in turn, determine the peculiarities of commercial mortgages:
• Non-residential objects are purchased for business activities and profit;
• Commercial real estate is a “piecemeal” property, therefore, it is more difficult to appraise and sell;
The solvency of a potential borrower, if it is an individual entrepreneur or a legal entity, is more difficult to assess than that of an individual. A commercial mortgage is a mortgage that a sole proprietorship or business entity takes on non-residential space for business purposes. It can be an office, warehouse, manufacturing building, or any other space that is used for business purposes. Commercial mortgages are taken out by entrepreneurs who don’t want to pay rent but need office or warehouse space. Usually, after doing the math, they realize that taking out a mortgage and owning the space is much better than paying rent.
LLC is engaged in professional surveys. The management expands the network of call centers and is looking for new premises. After analyzing the situation in the real estate market the founders realize: that the rent of the premises will have to pay more than the monthly payment on the mortgage. So they decide to take out a commercial mortgage for 10 years so they can finally own the office. In the future, they will be able to sell it or rent it out. Either way, it will be more profitable than paying to rent someone else’s office.
• FREE OF CHARGE processing of letter of credit transactions;
• No permanent registration requirements;
• An optimal solution for non-standard situations;
• Fast decision on loan;
• A personal manager from filing to closing;
• Prompt delivery on the deal.
How to get a loan:
• Apply online or at a bank branch;
• Gather the necessary documents;
• Get approval from the bank or find out what you need to get credit;
• Come to the bank to make a deal.
The financing a commercial property purchase for the purchase of housing has long been worked out. For commercial mortgages, too, there is a certain procedure, but it is complemented by a significant element of creativity. In the commercial mortgage sector, the struggle for customers is gaining momentum, and getting a loan every year is becoming faster and easier.