Your home business has done better than you anticipated. In fact, you’re thinking of moving it out of the garage and finding a commercial property to call your own. Whether you have in mind a mortgage for office unit, apartment building, shopping mall, store or some other kind of commercial space, there are some basic to keep in mind. Use these tips and it’ll be easier to narrow your options and ultimately find the one that’s the best fit.
Know the Credit Requirements in Advance
Instead of applying everywhere that seems to offer what you have in mind, do some research in advance. Take the time to find out what sort of credit requirements the lender has in place. That includes length of history, credit score, income minimums, and a number of other qualifications that applicants must meet.
Spending time on this quickly helps you determine if traditional lenders are the right fit for you. If not, there’s always the possibility of focusing your search on alternative lenders who have credit requirements that are more in line with what you bring to the table.
Consider How Much of a Down Payment You Can Put Toward the Purchase
Identify how much you could put down as part of the property purchase. Every penny that you can pay out of pocket translates into a lower amount that you need to borrow. Lenders are more receptive to approving mortgage applications when the amount is significantly lower than the current value of that property. It doesn’t hurt that mortgaging a lesser amount will also make it easier for you to manage the obligation.
Keep in mind some lenders will finance the entire purchase price, but you may end up paying quite a bit in interest and fees. When you finance an amount that is much lower than what the property is worth, the lender takes on less risk and is more likely to approve the application.
Take a Good Look at the Rates and Terms
Never assume anything about the rates and terms that a specific mortgage lender extends. Look beyond the interest rate and find out how it applies to the outstanding balance. Dig deep into the terms and find out if there are any recurring fees that become due at different times during the life of the mortgage. The goal is to ensure there are no surprises down the road and that you know exactly how much the mortgage will cost. Doing so makes it much better to determine if an offer is really as great as it seems at first glance.
Know How Much You Can Put Toward a Monthly Installment Payment
Be realistic about how much you can pay each month to cover the mortgage payment. A good rule of thumb is to look at your collected revenue for the past year and come up with an average monthly total. Do the same with your business related expenses. This information will help you identify the maximum amount that you can pay without creating undue financial hardship.
Remember that the best mortgage solution is one that you can manage with relative ease, comes with terms that work for you, and in general makes it possible to buy the property that you have in mind. Talk with a broker today and see what can be done. You may be surprised at how many options come your way.