What Makes a Property Suitable for a Commercial Mortgage?

Published ¤ 27/08/2010 18:01:19

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Why would you consider taking a commercial mortgage? Well, the idea of purchasing a commercial property is that it must be well suited to the needs of your business. This can be determined by several factors that are taken into consideration before giving you a commercial mortgage. The commercial mortgage lender will look at your business, what it does and how it may relate to the commercial property taken by you. Before taking out a mortgage loan for your commercial property, you should calculate your affordability with the help of a mortgage calculator.

If your company makes a particular type of product, the lender will ask you how long you have been making that product. They will also enquire about the market growth that you see annually. They will also consider the property and check whether or not it will meet the needs for making the particular product during the term of the loan. Have a look the various points you need to consider before searching for a property that you intend to finance using a commercial mortgage.
  • Adequate space: If you seek a property for commercial usage then you need to make sure that there is adequate space for the business to grow. The property needs to be big enough but not so big that it becomes difficult to arrange the maintenance costs from the revenue generated by your company. If you have the potential to rent out sections, then you can choose a bigger space. Thus a spacious property is good for a commercial mortgage.

  • The location: Your lender will also check the location of the property and see whether it is fit for your business. If you want a property to establish a pub, then you need to choose a road side location with maximum visibility. You should also make sure that the location will ensure maximum profitability for your business.

  • Space for employees: This factor is also taken into consideration by the lenders; they will determine the total seating capacity in the property that you have selected. They will also check whether or not the kitchen is sufficient to suit the needs of your employees, what the maximum seating capacity of the property and how much the average customer spend needs to be to make the mortgage payments.
In a nutshell, the kind of business does not make any difference but the business needs are what matters. Can the commercial property meet those needs? Determine your mortgage affordability with a mortgage calculator and take into account the above mentioned points when selecting a property suitable for a commercial mortgage. A good commercial property will always meet your current and long-term plans.
This article was originally produced by IPIN. Click here to see the original.
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