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What do you need to qualify for a commercial mortgage?

Matrix Mortgage Global – What do you need to qualify for a commercial mortgage?

commercial mortgage

 

If you are operating a business, then at some point you may be interested in applying for a commercial mortgage. Since the borrower on a commercial mortgage is typically a company rather than an individual, assessing credit can be more difficult and it is important to work with a mortgage broker who understands commercial mortgages.

In general, the qualification to obtain a commercial mortgage is stricter than it is for residential mortgages because the loan amount is usually much higher. The following are a few things that are considered when you apply for a commercial mortgage:

  • Debt service coverage ratio – simply put, this is how much money your business has to make payments on the loan.
  • Credit history – as with residential mortgages, most lenders prefer only to grant mortgages to those with good credit. There are however many alternative lenders that Matrix Mortgage Global works with that will still grant commercial mortgages even if your credit is less than perfect.
  • Current business situation – If you have a business that is already fully operational, lenders will typically want to see that you are already profitable. If you are getting a commercial mortgage for a new company, you may be required to provide a business plan or your financial projects. Depending on the lender, you may need to prove that you have a minimum net worth or a certain amount of liquid assets.
  • Type of business – when it comes to qualifying for a commercial mortgage, the type of business that you are purchasing the property for can also matter. In some circumstances, how the type of business affects the terms can be very complex so working with a professional mortgage broker is strongly advised.
  • Down payment – when you are buying a property for commercial reasons, it is usually expected that you will provide a larger down payment than you would if you were purchasing a residential property. For a mixed property, for example, you would likely have to make a down payment somewhere between 20-35% while a purely commercial property might require closer to 50%. The amount of down payment that is required is often tied directly to your risk profile.

Call Matrix Mortgage Global to apply for your commercial mortgage

At Matrix Mortgage Global, we have mortgage professionals that specialize in commercial mortgages and we can offer solutions regardless of credit history, income or debt levels. Contact us today at 1-877-371-5293 to book a consultation.

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