Banks across Australia offer commercial loans for property, but each bank differs widely regarding features, interest rates, and borrowing capacity.
Successful commercial property investing requires an in-depth understanding of the market, investment risks, and leasing arrangements. If you are planning to invest in commercial property and
looking for affordable financing options, read further:
If you are new to commercial property investment, you may be a little overwhelmed by the procedural formalities and other requirements. For one, you have to understand that commercial property investment is very different from a regular mortgage.
Understanding The Lending Process:
The process isn’t very different from residential property lending. Lenders are looking for your ability to repay, deposit and other available equity, the type of commercial property, and details about the lease and related conditions.
How Much Can You Borrow:
This largely depends on your salary and wages, and other income sources. The value of the property and evidence towards the expected use of the property also matters.
Look for Specialised Commercial Lenders
Look for loans from second-tier commercial lenders; they offer loans on terms better than those offered by the Big 4 banks that tend to charge a much higher interest rate. A Melbourne mortgage broker can help you find these specialised commercial lenders.
Look for Better Loan-to-Value Rations
Unlike residential borrowers, commercial property borrowers are offered a lower loan to value ratio (usually around 70%) unless they can pay a larger deposit. A good Melbourne mortgage broker can help you offer your residential property as security and even structure the loan correctly so that you get access to more cash on an interest-only loan.
Look for Better Loan Terms:
Commercial property loans typically last around 15 to 20 years. Borrowers have to show a better buying capacity and a stronger serviceability. Look for loans where you get to review or extend the loan term.
If you are new to commercial property investment, use a mortgage broker to help you find a better deal regarding borrowing capacity and repayment capacity. Schedule a free loan strategy session with our Melbourne mortgage broker for more information...