Commercial Real Estate Loan In Northampton
Securing a Commercial Mortgage in Northampton, TX With Help From Texas Funding and Consulting
If you are new at commercial real estate, you may be familiar with getting a home loan, however the commercial real estate loan mortgage process is quite different. It is important that you have an in-depth understanding of the process.
As a world-class commercial financing provider, Texas Funding and Consulting provides financing solutions to take your commercial real estate project to the next level. Texas Funding and Consulting is committed to providing superior service and a program that works with your commercial real estate needs in Harris County. The team will help you find the right mortgage, apply and get approved for a commercial mortgage.
What is a Commercial Mortgage?
A commercial mortgage is a loan secured by business property to purchase commercial property, develop land, or a building. The borrower may even use the funding to renovate offices and refinance existing commercial loans. Commercial loan funds can be used as capital to start a business or expand its operations. It can be used for developing or renovating owner-occupied business, buying commercial property, obtaining land development investments and acquiring premises to lease out.
A commercial mortgage is essential for business growth. The loan can be for renovating commercial property and purchasing large equipment. Commercial loans require a large down payment and impose harsher credit background checks on both your business and personal finances. Keep in mind, commercial mortgage lenders expect the borrower to repay the entire advance early by including a balloon repayment stipulation. A balloon payment requires a borrower to pay off the entire balance at once.
What Are the Popular Sources of Commercial Mortgage Financing?
Once you begin your research, you will discover many sources of commercial financing in Harris County. These commercial loans are offered by banks, credit unions, insurance companies, and government-backed lenders. You will also notice that private investors lend commercial mortgages but at much higher rates. The ideal type of commercial loan depends on the loan features you need to achieve your business goals.
Do Commercial Loans Require a Personal Guarantee?
Yes. Business owners must guarantee a commercial mortgage for lack of enough credit to secure financing. Credit requirements are based on the lender’s risk assessment. A personal guarantee connects a commercial loan to the borrower’s personal assets. It’s an unsecured contract so the lender can take any of those assets as debt repayment should a loan default.
What are the Terms of Commercial Real Estate Loans?
Commercial mortgages are available in short terms of 3, 5, and 10 year terms. Others are offered in 25 year terms. However, commercial mortgage terms are not as long as most residential loans, which is usually the standard 30 year term.
Interest Rates With a Commercial Real Estate Loan
As you will discover, commercial loan rates may be slightly higher than residential mortgages. It is usually around 0.25 percent to 0.75 percent higher. Depending on the establishment and type of financing, commercial mortgage rates typically range between 1.176 percent up to 12 percent.
What Indexes Are Used For a Commercial Real Estate Loan?
An index is an indicator or statistical measure of change in market securities. Lenders tie commercial loans to several different types of indexes. A few of popular indexes used for commercial mortgages and adjustable rate loans are the prime rate and LIBOR. Commercial loans rates are also determined by U.S. Treasury Bonds and swap spreads.
The average of the prime rates offered by banks to other banks. Lenders adjust prime rates depending on market conditions.
LIBOR (London Inter-Bank Offered Rate) is a benchmark for indexing interest rates all over the world. LIBOR is the rate used by London banks to lend funds to one another. It is also the rate used by banks that lend in the inter-bank market for short-term loans.
U.S. Treasury Bonds
U.S. Treasury Bonds establish the limit on how much lenders and banks can charge for real estate loans. The ten year treasury bond is a benchmark for commercial mortgages and residential loans.
Swap Spreads show the difference between the swap rate (fixed interest rate) and the corresponding government bond yield (sovereign debt yield) of similar maturity. Swap spreads measure the likelihood of how interest rates will rise.
Are You Ready to Discuss Your Commercial Real Estate Loan with the Experts in Harris County?
Texas Funding and Consulting offers many different commercial mortgage options. Call 713-344-1199 or visit https://funding4texas.com. The team will provide you with a free, no-obligation consultation. Texas Funding and Consulting can help you achieve your goals with a commercial real estate loan Northampton, TX.
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