Mortgages or Commercial Mortgages can be used for several purposes which may include buying business premises, extending existing business premises, making residential and commercial investments and developing property.
Usually the repayment period would be extended from 10 years to a maximum of 30 years. This could also go down to a minimum of 2 years. Some of the mortgage lenders provide commercial mortgages which offer interest-only payments for the initial 2 years and some type will let you defer it up to 2 payments per year. Whatever may be the plan, mortgages provide critical advantages as against rental property or a land. Thus, one has to consider advantages and disadvantages critically prior to taking this kind of a step forward.
Benefits of commercial mortgages
¢ Your business and the premise on which the business is functional will still be owned by you.
¢ You would be able to get great amount of cash as a result and can be a great boost to you in the long run.
¢ They do not fluctuate as compared to rent paid of residential properties and hence it can give you a standard business planning environment.
¢ Interest payments can be exempted under Tax deductions.
¢ Increased cash flow to let you use it the way you want it.
¢ Critically, low interest rates other than unsecured loans/overdrafts, offer low monthly costs.
Disadvantages of commercial mortgages
¢ you need a decent sized deposit.
¢ if you own the premises or business it can be harder for you to move it. But you can negotiate ending your rental agreement or find another business to take up your tenancy.
¢ you can leave yourself vulnerable to interest rate increases, if you have a variable rate mortgage.
¢ You are responsible for any of your property including maintenance, insurance and security
¢ Losing value on the property may reduce your capital.
By taking serious of this advantages and disadvantages, you may get what you really need and want to invest; one of these is buying a home.
A home mortgage is a loan given by a bank, Mortgage Company or other financial institution for the purchase of a primary or investment residence. The owner of the property or the borrower will transfer the title to the lender on the condition that the title will be transferred back to the owner once the payment has been made by the owner and other terms of the mortgage have been met. It will have either a fixed or floating interest rate, which will be paid monthly along with a contribution to the principal loan amount.
If you want to purchase a home, the first thing you must do is to clear off your credit status. This is the primary step. You must analyze the report, identify, pay off and close all your outstanding on your credit cards and then shop for mortgage. However, you must do the following steps before proceeding further, in order to become pre-eligible for a mortgage.
If you want to become eligible for a mortgage, you must give all information such as your assets, income and other liabilities to the lender. Based on these the lender will give you an estimate of how much you can borrow. The whole procedure is informal, the lender does not charge you fee or verify any of the information provided by you and does not guarantee an approval for a mortgage amount applied.
Based on the pre-qualification process, even if it does not guarantee loan approval, it does give a general idea about how much money lenders are willing to provide you if ever. This will give you a number to work with, which will also help you decide whether you are willing and ready to borrow that much money. And also to see which types of properties will fall within your price range.
If you care about lifetime cost or monthly payment, one of which that can help you with is Mortgage Calculator.
This are designed for individuals who would like to assess how much money they can afford to borrow for the purchase of a property, or to refinance a mortgage. It can also be used for comparing different scenarios for which a potential borrow maybe considering. This type of system may also helps to provide the knowledge of what the monthly payments may be. Consumers also learn any specific rates of interest that may be present within the loan. And finally, mortgage calculator provides an incredible peace of mind to most buyers.
Article by John Hoots of ChicagoMortgageSpecialist. For more information on Chicago mortgage lenders, visit his site today.
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