Commercial & Industrial
A commercial mortgage is a loan taken out on commercial real estate (as opposed to residential) with the property as collateral. The borrower is generally a company or business as opposed to an individual and the business may be either a partnership, limited company or incorporated. Consequently, assessing credit history is more complicated with this type of mortgage. You can also expect commercial mortgage rates to be significantly higher than residential rates due to the increased risk.
Types of properties
There are a number of properties that can be classified as commercial properties. It is important to identify exactly what type of property you are looking to finance. Residential real estate can be financed under a commercial mortgage if it is purchased as an investment property. This can fall into one of these categories.
- Residential apartment with 5 or more units
- Residential Commercial Mixed units
There are a number of other properties that fall under a commercial mortgage. You would consider a commercial mortgage if you are looking to finance an office, retail or industrial property.
Expected time frame
Residential mortgages usually take around 90 days to close, but could close as soon as 2 to 3 weeks. On the other hand, commercial mortgages take much longer and could take anywhere from 60 days up to a year.
Types of Commercial Mortgages
- Storefront with Apartments/ Residential Commercial (Mixed) Individuals
- Multi-family residential (5 or more units)
- Commercial plaza mortgage
- Office mortgage
- Industrial mortgage
- Farm land mortgage
For commercial mortgages, it can be difficult to compare rates as lending criteria are not typically advertised and terms and conditions can differ greatly. At Amazon Mortgage Centre, we work with you to determine what type of mortgage product best suites your need. We work with a number of commercial lenders as such we’re able to device the best package to achieve your goals.
- Office Buildings
While offices can be built in almost any location in almost any building, some modern requirements for offices make this more difficult. These requirements can be both legal (i.e. light levels must be sufficient) or technical (i.e. requirements for networking). Alongside such other requirements such as security and flexibility of layout, this has led to the creation of special buildings which are dedicated only or primarily for use as offices. An office building, also known as an office block, is a form of commercial building which contains spaces mainly designed to be used for offices. The primary purpose of an office building is to provide a workplace and working environment primarily for administrative and managerial workers. These workers usually occupy set areas within the office building, and usually are provided with desks, PCs and other equipment they may need within these areas.
Typical financing leads from a maximum of 90% Loan-To-Value down to standard 75%. It is depending on the type and location of the office complex. At Amazon Mortgage Centre we’ll work with you to device the right mortgage for your office project.
- Retail/Office Condominiums
Each year businesses spend thousands of dollars on rent and thousands more designing office space. At the end of the lease, all there is to show for their expenses and effort is a new round of negotiations with the landlord. Office Condominiums allow businesses to purchase their own space and experience the benefits of property ownership. Amazon Mortgage Centre is proud to be playing a part in helping office renters become owners.
Advantages to Office Condominium ownership include freedom from the unpredictable and stressful renting cycle, flexibility of maintaining your own space and control of planning for the future with stable and predictable costs. We at Amazon Mortgage Centre are proficient in eliminating wasted monthly expenses and helping you experience the value offered in a long-term investment.
The most obvious advantage of buying any income property is having other people payoff the debt on your investment property. And with interest rates low, there’s no time like the present to jump in.
There are a number of decisions to be made with regard to owning a multiple residence property. From property management to occupancy rates, being an owner carries a lot of responsibility. It’s a good idea to discuss your options with a financial advisor, a lawyer and an accountant before you start the process.
Mortgages for multiple residential properties are subject to governmental regulations Lenders may also have specific requirements for funding a mortgage of this type.
At Amazon Mortgage Centre, we’re experienced in working with multiple residential property mortgages. We’ll provide advice on financing and shop the market to ensure you get the best mortgage to meet your specific needs.
- Mixed Use
The difference between a commercial and residential loan can be thousands of dollars in interest and fees. A mixed-use property, one that has both a residential and commercial purpose, can go either way. The deciding factor is the amount of space allotted to residence and the space designated for business.
Many lenders will make the decision for you when it comes to the type of loan on your mixed-use property. If you have a 1,000-square-foot building with a store comprising 750 square feet and your home taking up the other 250, banks will consider it a commercial property. And if you lease out the residential portion of a mixed-use property as opposed to occupying it yourself, the whole property will be considered commercial. We’ll shop with different lenders to see what they can do for you.
A warehouse is a commercial building for storage of goods. Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings in industrial areas of cities and towns. They come equipped with loading docks to load and unload trucks; or sometimes are loaded directly from railways, airports, or seaports. They also often have cranes and forklifts for moving goods, which are usually placed on ISO standard pallets loaded into pallet racks.
Depending on the area and size of warehouse property you need to purchase, the Loan-To-Value and rate will vary. At Amazon Mortgage Centre we’ll work with you to determine the correct mortgage product.
- Gas Station
While there are still some institutional lenders that will look at gas station financing, the majority of banks, credit unions, and term lenders are only interested in gas stations that are relatively new, are under the flag of a major gas supplier, and have at least one strong tenant that contributes to the cash flow of the business.
To qualify with an institutional lender, you are going to also have to have a recently completed phase II environmental report, a commercial property appraisal, contamination insurance policy, and a tank monitoring system.
The institutional requirements will be very high and the time it take to complete the financing will likely take several months due to all the supporting information that will need to be collected or created by third party consultants.
Even the institutional lenders tend to be very geographic specific and will only entertain a gas station financing application if it fits into their portfolio at the time when financing is required.
Needless to say, it can be very difficult, costly, and time consuming to secure an institutional commercial loan for a gas station purchase or refinance.
We at Amazon Mortgage Centre have the expertise to follow up on the essentials so you meet the lenders criteria.
- Farm Land
Farming is more than a business; it’s also a way of life. Amazon Mortgage Centre specialists understand the factors that affect farming in Canada and are committed to building a long-term relationship with you. We can help you expand your operations, improve your cash flow, and finance equipment, quota or livestock.
Are you looking to purchase a hobby farm, or a home located on a property with more than 5 acres of land zoned as agriculture? We can help you to finance the purchase or improvement of your primary residence with either a Rural Property Line of Credit or a Rural Property Mortgage.