The commercial mortgage is an option to get a high value loan, with a long term to pay and lower interest than most of the options available in banks and financial institutions. To hire this kind of credit, you need to give a real estate as collateral, such as a house or land. Despite the advantages, care must be taken when mortgaging some good. Not always the output is as simple as it seems.
Advantages and risks of commercial mortgage
A business mortgage loan allows the client to obtain high values for any purpose. That is, it is he who defines how to use money. The most common cases use this type of loan to invest in a business or take out a debt that has higher interest rates. In addition to paying for studies, investing in other real estate, traveling or furnishing the house.
One of the main advantages is the term of up to 30 years to repay the loan, in addition to high limit of the value of the loan. Interest rates are also below the market average compared to other lending options. In general, the monthly interest rates of the banks are around 0.98% to 1.53%, generating annual rates between 12% and 20%.
However, the business mortgage loan also presents a high risk. In the event of default, the loan contractor may have to hand over the home to the bank, resulting in the loss of the property. Therefore, it is important to carefully analyze the real need to contract such a high amount and if there are no other lines of loan available in the market.
How to getbusiness mortgage loan
In order to mortgage a good and have access to credit, it is necessary to meet certain requirements of the banks, noting that not all have this type of loan. The first requirement is to have own property, registered in the name of the contractor.
The value of the property is evaluated by companies accredited to the bank or based on the tax card, when it comes to real estate up to $ 300 thousand. Most banks accept as collateral only residential property where the owner is an individual. Some still accept commercial real estate.
In addition to assessing the value of the property, the financial institution conducts a credit analysis of the client, checking the status of his / her credit and checking if he / she is able to afford the debt and pay the installments of the mortgage.
More information needed to getcommercial lending
For this, information is requested on the contractor’s family income, commitments with other financial institutions, monthly expenses such as water, electricity, telephone, transport, education, among others.
To know if the mortgage is the best option for a given case and make the right choice, you need to compare the pros and cons of different lines of credit, also researching in various locations in order to find the best conditions. Visit this site for more information : https://corinthiancapitalpartners.com/