How to Qualify for the Best Commercial Mortgage Rate

I think it’s safe to say that anyone interested in securing a commercial mortgage loan wants to get the best commercial mortgage rate possible. However, you may be surprised to learn all the different factors that determine what rate you will receive on your commercial mortgage request. For many consumer loans, a lender will mainly look at your credit score. For example: if you’re buying a new car, the dealership will pull your credit and if your credit is excellent, you will most likely receive their lowest rate. When it comes to getting the lowest commercial mortgage rate available, there are many things considered.  Of course, the credit score of the borrower is also considered in securing a commercial mortgage loan and is very important. However, there are many other factors lenders consider, including:

  • Property location – Properties in large metropolitan areas are considered lower risk
  • Good quality tenants – A Domino’s Pizza tenant is considered better than a generic pizzeria
  • Do the majority of tenants have long term leases?
  • Is there a good history of stabilized occupancy?
  • Has lease turnover been kept to a minimum?
  • Is the property in good condition?
  • Lower leverage is better – Is your loan to value 80% or 50%?
  • How is borrower’s credit rating?
  • What is the borrower’s net worth?
  • What is the borrower’s cash liquidity?
  • Does the borrower have experience managing property?

As you can see from this list, there are many factors to be considered when it comes to determining what commercial mortgage rate is given.

Contacting a good commercial mortgage broker who deals with many different lenders can also help you get a good rate. A good commercial mortgage broker will deal with many active lenders, and will have many lenders to choose from, increasing the chances that they will have a lender that specializes in the type of loan that you need. has a large portfolio of lenders who specialize in the following types of loans:

  • Apartment Building Loans (up to 80%)
  • SBA Mortgage Loans (up to 90%)
  • Owner occupied business real estate loans (up to 90%)
  • Medical practice acquisition loans (up to 100%)
  • Commercial mortgage loans


Investing in Commercial Real Estate

Are you thinking of investing in commercial real estate? Are you looking for a solid return on your investment? If you answered yes to these questions, you may want to speak to a commercial mortgage broker. Why should you deal with a commercial mortgage broker?  With today’s market conditions, the loan approval process is getting tougher and tougher. Banks and other lenders are very selective in determining what types of investment properties they are willing to finance. By paying attention to which types of properties lenders are willing to finance and which they aren’t, you may be able to make better investment decisions.  Commercial mortgage lenders are constantly evaluating which types of properties to finance.  This valuable data may help you determine which type of investment property to consider.

Which types of loans are banks and other lenders are currently considering?  Apartment building loans are very popular right now. Due to the turmoil in the housing and employment markets, many people are choosing renting over buying. This is creating demand in the rental sector. Other favorable property types include:  anchored retail centers, medical office buildings, and other general purpose multi-tenanted properties.  In addition, lenders like business mortgage loans where the owner will occupy the property and use the property to operate his/her own business.

You may want to think twice before investing in any of these properties, as they are tough to finance:  vacant property, raw land, construction projects, or retail space without anchor tenants.  In addition, lenders do not want to finance projects with insufficient down payments.  Seller financing and no-down payment deals will not be considered in today’s market.  Lenders expect to see the borrower invest a significant amount of money before risking their investment capital.

To learn more about what commercial underwriters consider when evaluating a commercial loan request, please see What Do Commercial Mortgage Underwriters Look for?