These loans have different purposes. As the name suggests, commercial mortgages are used for buying business structures like retail spaces, warehouses, and office buildings, to name just a few. Residential mortgages are used to buy personal properties like houses and condos.

One of the other big differences is commercial mortgages have higher interest rates. There are several reasons for this, including commercial properties being affected by unpredictable market conditions that increase default risk.

Commercial Mortgages Have Shorter Terms  

The commercial variety has shorter terms and can often include balloon payments. Lenders choose to examine their risk frequently. Businesses can refinance with shorter terms as market conditions change and they adapt to new opportunities.

One of the other advantages to a shorter term is these often end with a balloon payment. That way lenders can recover their principal earlier than with a residential mortgage and offer lower initial payments to businesses.

These Mortgages Require More Collateral Than Their Residential Cousins 

These mortgages also require more collateral, partially because the assets depreciate faster. Some commercial properties are harder to resell, and that’s another reason that lenders look for diversified collateral. These types include offices and warehouses, which can include things like receivables, inventory, and even machinery. 

OMJ Mortgage Capital is ready to help with your commercial mortgages. We have a good track record of funding billions of dollars in loans. Our company takes pride in its reputation, and we work with both financial institutions and alternative lenders

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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.

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In this situation, the building owner uses the premises for business purposes.

•   Getting one of these commercial mortgages allows for predictable financial planning. A property with a fixed mortgage rate is always better than dealing with potential rate hikes. As a business owner, you need to be able to forecast long-term financial strategies accurately.
•   There’s also a sense of control and customization. Property owners have the freedom to customize any space to their operational needs. That can include various upgrades, including energy-efficient retrofits and branding elements.
•   One of the most significant advantages of owner-occupied commercial mortgages is the potential for scaling up. It’s essential to keep in mind that properties appreciate value over time. That, in turn, allows businesses to put together equity. Equity is an excellent asset that can provide opportunities for diversification and a financial safety net.

There’s also the opportunity to generate some rental income. A business owner can use part of the property as a stable revenue source. That’s another excellent advantage to these commercial mortgages.

Looking for Business Loans?

OMG Mortgage Capital can look after owner-occupied commercial mortgages. We specialize in various areas, including financing for development, luxury properties and commercial land. We specialize in construction loans and other types of commercial financing. Contact us today to learn more about draws and other issues affecting commercial mortgages and financing. We are looking forward to helping you with these projects. Our priority is always helping your business achieve its goals. Getting in touch with us is the first step.

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• The type of property you want to purchase will affect the kind of commercial loan you get. Most lenders classify these properties into several categories based on occupancy rates, income potential, risk levels, and maintenance costs. Here’s an example. A multi-family property with long-term tenants and a good cash flow is less risky than a hotel. Those depend on seasonal demands.
• Understanding how the price was established is also helpful when you’re looking at securing commercial mortgages for land loans. It’s a good idea to compare similar properties in the general location. An appraisal is essential. One that’s gone through the Accredited Appraiser Canadian Institute is credible.

Remember, there are several reasons why lending institutions don’t usually offer similar mortgages to commercial and residential properties.

Commercial properties are often used for business purposes and are valued differently. That means a commercial building’s physical structure is taken into account. However, the structure’s potential income is another factor that goes into a commercial mortgage.

Condition of the Building

We also suggest that applicants take a good look at the condition of the building. For example, if extensive renovations are needed, getting a contractor to provide a detailed quote that can be factored into your purchase price is essential.

OMJ Mortgage Capital Is happy to help you look after your commercial mortgages for land loan needs. We are glad to arrange your mortgage through various financial institutions and alternative lenders for commercial and other property types. Contact us today so we can explore the different ways to help you achieve your business goals. We are always happy to help you achieve your business and residential requirements.

The post Here’s Some Excellent Tips for Securing Commercial Mortgages for Land Loans appeared first on OMJ Mortgage.

We understand how daunting the process can be as a commercial mortgage broker. An entire project can rest on the bank’s approval.  However, there are a few things you can do to increase your chances of success.

• Start by taking a careful look at your real estate needs. Spur-of-the-moment projects that are not carefully thought-out don’t usually win banker’s approval. Don’t make this common mistake. Many startups buy a place that meets their present requirements without looking towards the future.
• A carefully planned budget needs to include several aspects. Businesses need to consider more than the purchase price or base rent.  Renovations and production downtime during a transition often get overlooked. Legal fees are an important part of these commercial mortgages. 
• Make sure to prepare your documents before you apply. These can include details on the property you have your eye on and a solid business plan. Don’t forget you’ll need to have up-to-date financial statements.

Meeting with the banker before you bid on the property is a good idea. Especially if this is your first time applying for  commercial mortgages. That’s when the bank can advise you on other conditions that need to be met.

Assessments You Might Need

 You might need building condition assessments as well as an appraisal and a title search.

Show a little patience. Your bank will need time to go over your purchase offer. When you’re looking at commercial mortgages, don’t forget to consider any repayment flexibility. They might allow you some wiggle room to absorb the cost of moving your business. 

You might even be able to roll some renovation costs into the loan. Looking at the various financing options is a critical part of commercial mortgages. 

The post Here’s Some Tips for Getting Approved for Commercial Mortgages appeared first on OMJ Mortgage.

However, we’re just one of the team members that you need when you’re looking at buying or leasing commercial real estate. Here are a few other ones you need to consider.

• The accountant is important for your company’s financial metrics. They look at all of the numbers and can help you make the right decision about purchasing real estate. These are the professionals that can also help you with important items like up-to-date financial statements and a realistic budget.
• Once you decide to make an offer, a lawyer becomes extremely important. These professionals look after the necessary legal conditions. These are the experts that can take a look at contracts and perform any other aspects needed for due diligence. That could include anything and everything including zoning issues, any other encumbrances like court orders and even conducting a title search.
• Many lending institutions will require you have an environmental assessment report. That means you will also need to have an experienced and qualified environmental consulting firm on your team.

Other team members include a certified building inspector and an authorized appraiser. It’s important to understand any property’s fair market value before you commit. There’s a Canadian National Association of Real Estate Appraisers that certifies these professionals across the country.

Quick Mortgage Broker in Toronto Approvals

As your commercial mortgage broker in Toronto, we can add quick approvals and fast turnaround times as well as creative and customized commercial mortgage solutions. Take advantage of our proven track record by getting in touch with us today.

The post Here’s Some Other Experts You Need To Add To Your Commercial Mortgage Broker in Toronto Team appeared first on OMJ Mortgage.

Here’s a few steps that you can take to bump up your chances of getting financing.

• You’ll need to have your documentation in good order. That means current financial statements and a solid business plan. Including details on the industrial or commercial property you’re interested in helps.
• The state of your business matters too. If your enterprise is up and running, lenders will want to be sure that it is steady and profitable. Some institutions might want to see a minimum net worth so they can feel comfortable you’ll make payments on time.
• It’s good to have some flexibility in any lending institution’s offer. As your commercial mortgage broker in Toronto, we suggest looking into adding renovation costs into a term loan where possible. This is an excellent option if it adds value to the property.

Several different types of properties can be classified as commercial. It’s important to be clear on which one you are looking to finance. There’s some gray area. For example, you can finance a residential real estate purchase under a commercial mortgage if it’s bought as an investment property.

Commercial Mortgages For Offices

You’ll also be looking at commercial mortgages if you’re looking to fund an industrial, retail or office property.

Time Frame

There’s also a time frame to consider. Residential mortgages generally take about three months from start to finish. However, commercial mortgages take longer and the process might go on from two months to a full year.

We can help speed that along. In fact, as your commercial mortgage broker in Toronto it only often takes one or two days to get a letter of intent for commercial financing through us.

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