Compare Commercial Property Loans - BUYERS GUIDE 2018
How Much Does a Commercial Mortgage Loan Repayment Plan Cost and What to Look For:
Commercial mortgages deal with very large amounts of money to finance the purchasing of corporate land or business facilities, and as a result the fixed-cost fees alone can range from $2100 to $23,000, with additional fees typically being assessed as a percentage of the total cost of the purchase. When you factor in the huge amount of interest that may be assessed over the life of a corporate mortgage, it becomes clear just how vital selecting the right mortgage is.
Compare Commercial Property Loan Pricing
First of all, in many instances you will have the best luck by using a commercial mortgage broker to help you secure the best rates and terms on your loan. Mortgage brokers work with multiple lenders to help their clients find the best rates. They are also knowledgeable about the various mortgage structures available, and can help you find the one that fits your particular financing needs.
The amount of down payment required plays a factor in what commercial mortgages best suit your needs. The needs typically fall between 20 and 30 percent, although some may go as low as 10%. The higher your down payment in relative terms to the amount borrowed, the lower the interest rate you will likely be able to secure.
If you want to get the best rates, and have the best experience possible when negotiating your mortgage, look for a lender or broker that has experience in your particular area of business. Evaluating the security and profitability of a business is a key aspect of commercial mortgage lending, and professionals with experience in a given industry are able to do this more efficiently and accurately. For instance, the business of operating residential apartment buildings is much different than the manufacturing industry. Finding a lender that specializes in your niche is always a smart move.
What You Can Expect to Pay for Your Commercial Mortgages
The fees that mount when securing a commercial mortgage start with appraisal of the property. For a small property this could be as low as $1000, but larger properties can easily cost $5000 and up. Environmental surveys are required in many lines of business that require the storage of potentially hazardous materials, and can range from a few thousand to tens of thousands of dollars. Legal fees typically add between $1000 and $10,000 to the cost of closing a commercial mortgage, while administration fees may add another $500 to $4000.
At the end of all these fees, the prices of the broker’s commission may also cost between 5% and 7%. However, these fees are all assessed on a one-time basis. This makes the loan interest rate the most important factor, as it affects your costs throughout the length of the commercial mortgage.
Commercial property loans for business allows people to buy land, buildings, or other property without crippling your business finances. Like a residential mortgage, a commercial property loan uses the property purchased as the collateral against the loan.
Unlike the typical pre-approval you might acquire for the mortgage on a house approvals for commercial mortgages are nearly always based on the property you're looking to purchase. A credible business plan and fair evaluation of the property are essential to getting approval for a commercial property loan.
Commercial Mortgage Loan Sample Costs
Below are a few examples of prices for Commercial Mortgage Loans which will give you an idea how much you will pay for your purchase.
- 10% - 30% average Down Payment
- $500 - $1,400 average Application Fee
- Appraisal Cost is generally between $1,200 to $5,000
- 15 – 20 years typical Repayment Terms