Understanding Commercial Mortgages – it is a good think to consider investing into a property especially if you find it a burden renting commercial premises or you want to expand your business. The available option is to explore the available Sherwood Mortgage Group — Ontario mortgage rates commercial mortgages offered which are always very good sources of business financing.
Key consideration points – with commercial mortgages, you will not expect any increases in rent, but of course you will have to put up with increasing monthly repayments if you have a variable rate plan. However, you can as well acquire a fixed rate mortgage for a particular duration.
If there is an increase in the value of the property, your business capital will increase which mean that there will be a tax deductible to interest repayments on the Sherwood commercial mortgage. To help meet those monthly repayments, you could opt for renting out a portion of your premise to a different company.
Commercial mortgages repayment options are not similar to the home loans, but they usually attract higher interest rates as they are usually seen to have a higher-risk. It is therefore important to have a large deposit of at least 20% which you will use to offset this risk.
Important to note also, is that commercial mortgages sometimes have additional costs associated with them, so it is important to find out from the lender if the loan they are providing has such costs.
The market is full of commercial mortgages providers including; banks and specialist lenders among others. It is therefore prudent to search the market for that provider that will cut out good deal at the right price and one which will be comfortable for you.
Types of commercial mortgages – there are three main purposed that commercial mortgages can be used for and they include:
Owner occupied Commercial Balloon Mortgages which are usually used for two business situations. The first situation could be that a business wants to buy the premises where it is currently operating from whilst the second situation is that the business wants to move into a new premise which it wants to buy.
Residential Buy-to-Let – purchasing residential property for rental is another common scenario for commercial mortgages. However, this area is well exploited by professional landlords who have property portfolio or limited companies that Buy-to-Let.
Commercial Buy-to-Let – commercial mortgages can as well be used to buy-to-let as well just as in the case of residential buy-to-let. A good example is purchasing a warehouse using your company and then letting it out to another business. Even though this type of mortgage shares similarities with residential buy-to-let, the lender will have to look at the various different factors since renting out commercial properties is not that easy.