Commercial Mortgages - U Wealth Financial Ltd.

Commercial Mortgage vs. Residential Mortgage

Differences that matter when applying for a commercial mortgage:

The collateral for commercial real estate loans (commercial mortgages) is various types of commercial real estate; the collateral for home loans (residential mortgages) is residential real estate. However, residential real estate with more than 4 units is also considered commercial real estate, and the loans available for them can only be commercial mortgages.
Applicants for residential mortgages are generally individuals and families; applicants for commercial mortgages are generally legal entities, i.e., companies or enterprises. Oftentimes, it's required for an individual to register a holding company in order to buy and/or hold commercial properties.
The approval metrics of commercial mortgages are different from those for residential mortgages, and the turnaround time is relatively longer.
Commercial mortgage rates are generally higher than those concurrent residential mortgage rates for the same period, not always though.
All the costs associated with commercial mortgage applications, even the lender's legal fee, are borne by the applicants, while applicants for residential mortgages generally only need to bear part of the costs.
There are huge differences among commercial properties, and so are the application and approval of commercial mortgages secured by different types of commercial properties. For example, the loan approval for a hotel is completely different from that for an apartment building.

How to Get a Commercial Mortgage

Consultation

Consultation

Consultation

Identify your mortgage needs & financial goals;
Find out what you need to apply for a commercial mortgage, land loan, or construction mortgage

Preparation

Consultation

Consultation

Offer to purchase or Cost budget for renovation;
Set up a company & its ownership structure, if not in place;
Prepare company financial statements

Application

Consultation

Application

Submit application;
Provide documentation;
Go through the approval process;
Get a term sheet/LOI;
Fulfill requirements such as appraisal;
Get final approval