Commercial Mortgage

A commercial mortgage is a mortgage used by a business to purchase real estate for business purposes.

Most commercial mortgages work just like residential mortgages: a lender makes a loan which is used to purchase a piece of property. The deed to the property is used for collateral and the business makes payments on it just like a homeowner does.

As in a residential mortgage, the lender charges interest in an attempt to make a profit on the deal. Just as in a residential mortgage the lender can foreclose on the property if the borrower doesn’t pay the mortgage.

Commercial Mortgage Industry

The commercial mortgage industry isn’t as regulated or as structured as the residential mortgage business. Instead the commercial mortgage market is more competitive and open. This means there are some choices available in commercial mortgages that aren’t found in residential mortgages.

Many lenders issues commercial mortgages because they can be a highly profitable investment. Since the market is highly competitive the commercial mortgage customer can often get a really good deal if they are willing to shop around.

Commercial Mortgage Lenders

In general there are three kinds of commercial mortgage lenders operating in today’s market; banks, third party lenders and mortgage brokers.

Banks still issue a lot of commercial mortgages but they can be very hard to work with. Bank mortgages are often more expensive and come with high fees. Many banks only issue mortgages to established businesses with good credit.

Third party lenders are companies that specialize in issuing commercial mortgages. Third party lenders are usually easier to work with and can issue mortgages. Third party lenders will more willing to overlook bad credit and more likely to work with new businesses. The fees and interest rates charged by third party lenders can be much higher than other lenders.

Brokers are professionals who arrange mortgages and other loans for businesses. The advantage to working with a lender is that they can offer a business a wide variety of choices for a commercial mortgage.

Commercial Mortgage Online

The average business will probably have to work with a third party lender or a broker to get a commercial mortgage. Fortunately it’s real easy to find these professionals by going online.

There are many websites that connect businesses with issuers of commercial mortgages. These websites often give borrowers a wide choice in the mortgages and other options.

The way to find a commercial mortgage offer online is to simply type the words commercial mortgage into a search engine. This should give the business owner a wide variety of choices in her search for a commercial mortgage.