What are commercial mortgage interest rates? Commercial development loans are used to enable a property developer to secure land and/or buildings and develop a site for sale or renting. In some cases the specialist lender will require the developer to produce a “Property CV”. This will have to show details such as his/her experience with similar projects and their property portfolio. Often a short business justification is required which should describe the reasons for wanting to purchase the site, and the intended development activity. There are several financial products that can be used to support such projects, each having their own advantages and disadvantages.
Commercial mortgage lenders base their lending decisions on many factors. The main factors are:
Loan to Value (LTV)
Intended use of the money
Applicants credit history
Access and quality of supporting information
Each lender apply a different criteria to variations in commercial property type, and then determine the success of the application, and the interest rate they will lend at, on the history, experience and credit worthiness of the individual(s) applying for the loan. Sometimes the self-certification lenders’ criteria are significantly different from mainstream criteria, other times they are quite similar (with obvious differences).
Lending Criteria Differences
Property Type and Age
Basis of the Valuation
Maximum LTV’s Available
Applicants Industry Experience
Lending Risk – individual, company, or credit history
What is constant… is that maximised LTVs, and the lowest interest rates, are offered to companies/individuals in desirable industry sectors, with the highest credit scores, solid company accounts, and well written business plans. Commercial mortgage financing as a matter of fact can be real easy to achieve as long as your company has strong income background.