Advice on Your Adverse Credit Commercial Mortgage
Getting a commercial mortgage can be hard for those with a bad credit history. However, some availability of credit is essential to starting or running a business. Mortgaging your commercial property for the loan somewhat improves your chances of getting a loan. Still, there are a few aspects that need to be considered if you are planning to get a commercial mortgage or if you already have one.
Different lenders are different
It is essential that you perform a background check of the lender. Some reputed lenders don’t offer commercial mortgages for those with bad credit history, but some do. On the other hand, there are predatory lenders, who will eagerly offer sub-prime mortgages on interest rates and fees that may not be clear at first. If you spend some time calculating the numbers, you will find that the APR (annual percentage rate) of these mortgage offers is very high, and not worth it. However, there are still mortgage companies that have fair offers for subprime mortgages. Some lenders may look beyond your credit history and send someone to check out your business or commercial property. You will have to spend some time to research and find an appropriate lender who offers fair terms. Hiring a broker can sometimes help you, since a broker is much more likely to be familiar with the lenders in your area and also negotiate on your behalf.
Have reasonable expectations
Since your credit history is bad, you must have reasonable expectations. You will not have credible lenders eagerly offering loans. If you get approached by any eager lenders, ensure that their offers are not predatory loans. The interest rates will be higher. However, if you keep up your payments very regular for years, there may be an option of refinancing with a reduced interest rate. Another aspect to remember is that you cannot afford to fall behind on your payments. Your interest rates are going to make it costly. Also, you cannot afford to further deteriorate an already adverse credit history, or you may just erase your hopes of ever getting a credit again.