Business Mortgage Advice

Filling your vacancies is key to managing your mortgage payments.

Getting a business mortgage or commercial mortgage is about qualifying, not just on paper with a high net worth and credit score, but also through the impression you make professionally. Understand the property you want in terms of demographics, location and property description. Be prepared to convince the lender that you have the experience to manage a commercial mortgage, especially if you don't have a portfolio of income-generating properties to support your request.

Be Prepared

Have current documents. If the property is listed, provide your lender with the listing showing the amount you need. At this stage, rather than your lender pulling your credit score, if you can get your score in advance through Transunion, Equifax or Experian it will help you know in advance what you may be up against. Your personal strength often gets you approved. It will help to have your 401(k) and statements of other assets to show your financial strength.

Try to Find a Mortgage Without a Balloon Payment

Unless you are in an established business with predictable cash flow, you may not qualify for a renewal on your mortgage. A lump sum balloon payment which is generally due within three years to 10 years can put you in a bind and may involve refinancing your home, incurring more costs. Try to find a commercial mortgage without a balloon payment and which spreads the loan payment out evenly. Although your monthly payments may be higher, if you can manage the payments, your equity will build faster.

Make Your Monthly Payments on Time

Make your monthly mortgage payments on time and your lender will be happy. Your lender really only is interested in monthly payments. Even if the value of your property doubles, the lender won't foreclose to get an extra piece of the profit. Maintain your integrity. If you can't make your mortgage payment on time, call your lender in advance, advise him of the problem and request the extension you need with the details of repayment.

Fill Your Vacancies to Cover Your Mortgage Payments

An apartment building complex can generate enough income to repay the mortgage but only if you have enough leases to fill the vacancies. Make sure you have enough leases to cover your mortgage.

References

• Commercial Mortgage Lenders: Commercial Mortgage Lenders Advice + Tips
• Work.com: Guide to Commercial Mortgage Lenders: No Balloon Payment
• CreditReporting.com: Information on the 3 National Credit Reporting Agencies or Credit Bureaus
• LendingTree: Commercial Mortgage Loan Documentation
• BuyerZone: Commercial Finance Mortgages - Avoiding common misconceptions
• My Own Business: The Art of Getting the Money

Resources

• CreOnline.com: New Ways to Fill Your Vacancies