Perhaps you are looking for an investment opportunity and have decided that you want to look at real estate, but you don’t want to go with a residential property. Rather, you would like to go with a commercial property, such as an office or professional building with tenants. If the amount of money needed is beyond what you presently have, you will need to secure a commercial real estate loan in order to purchase that professional building in Boca Raton, Coral Springs, Deerfield Beach, Fort Lauderdale, North Miami, Pompano Beach, FL, or the surrounding areas. When you are looking for that commercial real estate loan, be sure to give a call to Graceful-Lending to learn how they can help you purchase that commercial property.
Differences Between Commercial and Residential Property Loans
While on the surface a commercial real estate loan looks and acts a lot like a residential real estate loan, there are important differences that you need to be aware of. These differences will likely impact how you move forward on things, and it might make some aspects easier and other aspects more difficult. Knowing these differences at the beginning of the process will provide you with important information so that the rest of the process is more straightforward.
The first difference between a commercial real estate loan and a residential real estate loan is who they are given to. Where a residential loan is provided to an individual, or often a couple, a commercial loan is usually given to business entities, such as corporations, trusts, partnerships, and other groups. These groups are also often formed for the express purpose of owning commercial real estate. There is an important additional piece regarding these commercial entities. If they do not have a track record for payments or have no credit rating, then the people who are the principals of the commercial entities will be required to personally guarantee the loan.
Another important difference is the typical length of the loan type. Residential real estate loans are often provided for up to 30 years in length. Commercial real estate loans, by comparison, are often for 5 years or less but can be up to 20 years in length. When you go looking in Boca Raton, Coral Springs, Deerfield Beach, Fort Lauderdale, North Miami, Pompano Beach, or the surrounding areas for your commercial property to buy, be sure to talk with the team at Graceful-Lending who can help provide important details for you on your commercial real estate loan.