Thinking of applying for a commercial estate loan? This is a huge step, so you might want to gather as much as information about loans. The best place to begin your homework would be online. There are thousands of websites that offer insights on what commercial estate loans are all about.
Knowing the Basics
First and foremost, you might need to understand what commercial estate loans are all about. Commercial estate loans are lending instruments that let you purchase commercial properties. This is an apt choice for you if you are in a real estate business.
Here the collateral is your commercial building. This is secured by a lien wherein you give an authority to your creditor that in any situation if you are unable to repay the loan, the creditor will be able to seize your collateral.
Various Types of Mortgage and Time Period
Real estate loans are called by different names. If you plan to apply for a loan in Estonia, then you need to know the local term for real estate loans which are Laen kinnisvara tagatisel. It is always useful to learn the language of the country you live in.
Now commercial estate loans can be of various types or time period. These are as follows:
- Fixed Mortgage Rate
- Balloon Mortgage Rate
- Adjustable Mortgage Rate
Fixed mortgage rate is a fixed rate loan, where you pay a fixed rate of interest on your loan for a specific time period. Here you need not have to worry about the fluctuation of interest rates.
Balloon mortgage rates, on the other hand involve paying only the interest on a month on month basis. You need not have to worry about paying off the interest amount. You have to pay the entire amount at the end of your loan period.
Adjustable mortgage rates as the name suggests involves fluctuating interest rates. Initially you get low fixed rate for a specific period and gradually the interest might fluctuate depending on the market.
The time period for commercial estate loans is of two types:
- < 3 years
- > 5 years
Types of Commercial Estate Loans
Not all commercial estate loans will work for your benefit. That is why you can choose from different types of commercial estate loans which are as:
- Bridge Loans
- Hard Money Loans
- Traditional Mortgage
- CDC/SBA 504 Loans
- SBA 7(a) Loans
Everyone cannot qualify for a real estate loan. You need to have the right credit score to get through. You can always discuss with your bank on what your credit score should be to apply for commercial loans. Secondly, you need to have enough cash flow.
A word of advice here would be to not to rely on one bank for your loans. Different banks have different criteria, so if one bank rejects your application, that does not mean another bank might follow suit. If you look for loans from credible resources, then BestCredit is your safest bet.
John Brookner has written this article. If you are looking for the best rates for your Laen kinnisvara tagatisel, then BestCredit, located in Tallinn, Estonia is the best option for you. You can visit their website or mobile application to look at the different types of loans they have to offer.