A Guide To Commercial Real Estate Loans
Commercial real estate loans are very common these days since people are becoming much interested in making sound investments in the real estate industry. Every one of us wants to get a good piece of real estate as a future investment but the tricky part is to secure a loan that is good enough to cover all the expenses. Unlike home loans, the process of acquiring a commercial real estate loan is much more complicated. To make things a little simpler for you, a brief guide describing various aspects of commercial real estate loans is given in the paragraphs below.
Commercial real estate loan
A commercial real estate loan may be referred to as a debt based arrangement between a borrower and a lender where the borrower acquires the funds to purchase a commercial property.
Tenure of commercial real estate loans
There are different types of commercial real estate loans with different tenures. They may be as short as just a few months or may go for as long as up to 30 years depending upon the contract agreement.
Different types of commercial real estate loans are associated with different types of interest rates. They may be variable or fixed depending upon the tenure of the loan as well as the other details in your agreement. In most of the cases, these loans usually have variable interest rates.
Qualification for these loans
In order to get a commercial real estate loan, the borrower is needed to meet a certain eligibility criteria that scrutinizes your application and figures out if you are a legitimate candidate or not.
Your credit history does not have to do much with being eligible for a commercial real estate loan. However, it needs to be 680 or higher. What’s more critical in this regard is that it doesn’t comprise of any recent bankruptcies, foreclosures or tax liens. If that’s the case, there is a good chance that you might not be able to secure such a loan.