A Guide to Business Mortgages
When getting a commercial mortgage, it's important to know what to expect. Too often, business owners need money quickly and take the first deal they find. When choosing a commercial mortgage, you should take the time to learn about all of your options. If you know more about commercial mortgages, you can avoid some common problems.
It's important to learn as much as you can about the process of getting a commercial mortgage. Here are a few steps that will help you get started:
Before you try to get a commercial mortgage, try to learn as much as you can about what's out there.
Before you apply for a loan, you should get together all of your financial documents, check the credit history of your business, and fix any mistakes on your credit file.
Make sure your accounts are open, and if you're starting a new business, a simple business plan is a must.
Find out how much you can really afford to borrow, and make a budget and cash flow that are accurate.
Keep accurate notes; make a file and put all loan documents and correspondence in it.
Once you know you need a commercial mortgage, look for a commercial lender or broker and be ready to compare prices. If someone tries to steer you to only one lender, be wary. Don't be afraid to ask them what commercial lenders they work with and why they recommend them.
Before you apply for a commercial mortgage, it's a good idea to check your credit report to make sure it's correct and full, even if you don't have credit problems. If your credit report has wrong information, you should try to get it changed. Lenders can now get more information about a business's finances, so it is important to make sure that this information is correct.
If your credit report does have negative information that's true, but it's because of something like illness or a short-term loss of income, be sure to tell the lender or broker what happened. Don't think that you have to pay a lot to get a commercial mortgage.
Before you look for a commercial mortgage, you should figure out how much you can pay each month. Before you apply for a commercial mortgage, you can do this yourself by figuring out how much your costs are and how much money you are worth. Online, you can find commercial mortgage calculators that can help you figure out how much you can afford.
But it's not enough to just know the amount of the monthly payment or the interest rate. When comparing commercial mortgages, make sure you look at the same information in each loan, such as the loan amount, loan term, type of loan, monthly payment, penalties, and features.
There are usually a lot of fees that come with a commercial mortgage, such as administrative fees, broker fees, and transaction fees. There may also be early settlement fees and costs for third parties. When you apply for a commercial mortgage, every commercial lender or broker should give you an idea of how much it will cost.
TIP: Ask about the annual percentage rate (APR) of the commercial loan (APR). The APR is a yearly rate that includes not only the interest rate but also any setup fees, broker fees, and other credit charges that you may have to pay. This will give you a clear idea of how much your loan will cost and let you compare the costs of different loans.
TIP: Never take a promise made over the phone about an important part of the loan. You have the right to get promises in writing, and a professional should never be afraid to give this to you. If your lender won't put his promises in writing, you shouldn't count on them.
