Commercial mortgages: we do them too!

Have you ever considered purchasing an apartment building? Chances are you don’t have enough money to buy it outright. That’s why there are commercial mortgages. In fact, you usually need a considerable amount of a down payment to purchase a commercial building.

Commercial vs. Residential Mortgages

Commercial financing is different than regular residential mortgages. The biggest difference is that to qualify for the purchase of a commercial building, such as an apartment building, The net profits of the building are looked at in this case rather than your personal ability to qualify as you would for a regular residential mortgage. In other words, you do need decent credit, and you need to have some background in managing a rental property, but they do not look at your employment income in this case. They look at the income that is generated by the rents in the apartment building.

Furthermore, unlike residential borrowing where you can get a mortgage of up to 95% of the value of the home, for commercial mortgages, you need at least 15% down.

The rates are generally higher for commercial mortgages versus residential mortgages. For example, an insured purchase of a commercial property currently could run you around 3.09% whereas residential mortgages run in the mid to high 2’s currently.

If you are interested in purchasing a commercial apartment building, please don’t hesitate to ask any questions. We are here to help!

Robert Floris is a Mortgage Broker. His office is located at 651 Fennell Avenue East in Hamilton, Ontario. If you would like to speak with Robert, he can be reached at 905-574-9200 #215. Alternatively, you can contact Robert here.

If you would like to apply for a mortgage online, please follow this link.

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