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. Selectcommercial.com 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
You can check out our commercial real estate loan rates here. Then use our commercial mortgage calculator to determine your monthly principal and interest payment.
Author
Stephen A. Sobin is the President and Founder of Select Commercial Funding LLC. Mr. Sobin has over 35 years’ experience originating commercial real estate loans. He formed Select Commercial to offer commercial mortgage banking and real estate capital advisory services to his clients on a national basis. His goal was to become an advocate for his clients and to help them navigate the ever-changing economic conditions facing the banking industry and to assist them by providing access to commercial real estate funds despite the uncertainty of the capital markets. The company was founded on the belief that most small to medium sized property and business owners lacked the expertise and sources to obtain the best financing options in the $1,500,000 to $10,000,000 range. While large real estate companies often have in-house finance professionals, most small to medium sized borrowers do not have the same access to professional advice and sources of funds. Mr. Sobin focuses on providing those services to this segment of the market.