So you have decided to purchase a commercial property for investment, which one of the commercial mortgages will you have you choose from?
Mortgage loans can be divided into two categories:
How do you pay interest on a commercial mortgage?
Most commercial mortgages are paid at a variable rate. Typically, a rate will be quoted as X% over base or LIBOR, and this in residential terms would be called a tracker mortgage. Fixed-rate mortgages are available and for amounts under Kes 5,000,000, where the lender takes the rate risk themselves, they may be advantageous.
The rates charged for commercial mortgages and business loans are not determined from the off-set like most personal loans are. Therefore, lenders usually have a risk profile that they work to, so if your loan falls outside their risk profile it will be refused.
What fees are involved?
Eligibility and criteria
In order for you to qualify for a commercial mortgage, you’ll need to pass the lender’s eligibility checks which usually includes:
Alternatives to a business mortgage
There are several alternative options you can choose from if you decide that a business mortgage is not the right choice for you:
Bridging loans can help you complete the purchase of a property before you manage to sell your existing home.
Short-term loans can help you access funds without making any long-term commitments. This is often used for financial relief to cover working capital, cash flow, and a variety of expenses.
Personal loans can be used to borrow anywhere – you do not have to be a homeowner to apply.
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