There are a wide variety of commercial property loans available and most work in much the same way as a residential home loan. As an investor you can choose from a variable rate, fixed rate, combination of both, principal and interest or interest-only loan, often with useful features available like fee-free additional repayments or an offset facility.
Alternatively, you may prefer a line of credit commercial mortgage as this provides a maximum borrowing limit but you only pay interest on the funds drawn down.
You usually need a larger deposit to secure approval for a commercial mortgage. Most lenders offer a maximum Loan to Valuation Ratio (LVR) of 70%, which means you would need to save as a deposit, a minimum 30% of the purchase price plus costs. If you are a home owner, offering your home as collateral (security) for the loan can be a way of securing a lower rate loan. In some instances there are lenders offering an 80% LVR requiring a minimum deposit of just 20% of the purchase price plus costs.
When we first meet we will find out as much information as we can on your current financial position. It’s best to bring as much information as you can to this first meeting – like a copy of your tax returns and financials, bank statements as proof of saving, your driver’s licence and loan statements if you have them.
If you are interested in purchasing a commercial property or re-financing your existing loan contact us!