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Commercial Mortgage Loans

Commercial mortgage loans are provided by lenders for purchasing properties and equipment, or for meeting operating costs for commercial or business purposes. These loans usually have lower interest rates (6% to 13%) than residential loans. Thus, commercial mortgage loans are considered as useful tools for establishing and improving a business. The main beneficiaries of commercial mortgage loans are real estate businessmen engaged in construction, acquisition and refinancing of properties.

Commercial mortgage loans are secured loans, that is, you must provide a security, property or business asset, for getting these loans. Like home mortgages, you have to repay amerinet these loans within a specified period of time. Usually, a 2% arrangement fee is charged for these loans. Commercial mortgage loans may be fixed or adjustable rate mortgages. The term of these loans can vary from 10 to 30 years.

Commercial mortgage loans offer more flexible repayment options than traditional loans. You can pay on a biweekly, monthly, quarterly or annual basis. Many lenders offer a fixed interest only period. You can repay commercial mortgage loans by generating additional funds from assets you purchased using the loan.

Qualifying for commercial mortgage loans can be a little difficult. The loan provider will look at the resale value of the property, the income generated from the property, your company’s credit history and income resources, and also the worthiness of the guarantor. The minimum loan amount available for commercial mortgage loans varies with the lender – it usually falls somewhere between $100,000 and $250,000. The maximum amount available is usually unlimited, but it solely depends on the value of the security. Most lenders provide 70% to 90% value of the property as maximum loan amount.

Many online mortgage providers offer commercial mortgage loans. These include conduit lenders, portfolio lenders including banks, credit companies and life insurance companies, government sponsored enterprise (GSE) and non-bank lenders. Generally, conduit companies and credit and life insurance companies offer long term loans.

The terms of interest, interest rate and the minimum loan amount available defer with the lender. There are many sites on the Internet that provide comparison of interest rates of different providers.

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