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Commercial Mortgages: Ottawa

Commercial Mortgages Ottawa from Capital Mortgages

Commercial Mortgages: Ottawa

Commercial Mortgages Ottawa: The Basics

Small Commercial Mortgages are designed for small businesses or investors that would like to purchase or refinance commercial real estate. As one of Canada’s largest brokerages for commercial property, we can tailor a financing solution to meet your financing needs.

What is a commercial mortgage?

Firstly, a commercial mortgage is a loan taken out to purchase or refinance a commercial property. The type of commercial property is determined by the lender. Larger businesses will be covered by a mortgage that allows them to receive funds more easily.

What is a residential mortgage?

Secondly, a residential mortgage is a loan taken out to purchase or refinance a residence, such as a home or condo. The type of home is determined by the lender. Larger families and growing families will have a greater demand for a residential mortgage.

The Benefits of Commercial Mortgages in Ottawa

Why are commercial mortgages good?  Higher Returns for Income Portfolio.  The most significant advantage of commercial mortgages is the significant income potential. These can include between 5% to 12%+ of the mortgage profit from current interest rates, paid in addition to income from other forms of financing.

Some of the features of these deals include payment structures which allow you to “pay down” principal over a period of time or varying lengths of time and in some cases even earn a modest return on your investment. The amount of income earned is dependent on your credit score and debt service ratio, which are two factors you can reduce via repayment plans or loan modifications.

Key Considerations

Can a self-directed investor afford the required amount of equity?  Will property they are purchasing meet your desired risk appetite?  Are you able to meet your tax obligations on an annual basis?  Is it in a location you are comfortable with?  Where can you find more information?  Commercial property is not without its risks and liabilities.

Whether you are buying a commercial property or refinancing one, there are many factors to take into account and be aware of. There are some important factors that need to be addressed before a decision to buy a commercial property can be made. This post will explain some of these factors, including:  Evaluating the risks involved with buying or refinancing a commercial property.

Costs Associated with Commercial Mortgages

Most small commercial mortgages are issued by banks, which usually charge a premium of up to 5%. A large number of banks operate with a traditional mortgage format. For this reason, many lenders usually require borrowers to provide three to four years of security and their guarantor’s guarantee for the full amount of the loan.  Commercial property loans require a “qualification” process, which includes an assessment of your commercial properties, your cash flow, your credit history, and your income.

In summation, rates are on the way up and will be for some time. This will impact residential mortgage holders that rely on their credit rating. As credit conditions tighten, borrowers will need to show they are in a better position to make their mortgage payments. If rates continue to increase, this could impact our ability to lend money to our customers.

We here at Capital Mortgages look forward to assisting you with commercial Ottawa mortgage needs. Contact us today by calling us at: 613-228-3888 or email us direct at: info@capitalmortgages.com

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