Mortgage Agent based in London and Windsor, Ontario
A Commercial Mortgage is a loan taken out on commercial real estate (as opposed to residential) with the property as collateral. The borrower is generally a company or business as opposed to an individual and the business may be either a partnership, limited company or incorporated. Consequently, assessing credit history is more complicated with this type of mortgage. You can also expect Commercial Mortgage rates to be significantly higher than residential rates due to the increased risk.
There are a number of properties that can be classified as commercial properties. It is important to identify exactly what type of property you are looking to finance. Residential real estate can be financed under a Commercial Mortgage if it is purchased as an investment property. This can fall into one of three categories.
- Pure residential, 1-4 units
- Pure residential, 5 or more units
- Residential Commercial Mixed
There are a number of other properties that fall under a Commercial Mortgage. You would consider a commercial mortgage if you are looking to finance an office, retail, or industrial property.