Commercial Mortgage Rates – Details and Decisions

By Doherty • February 10th, 2011
Bank of America Building

Image by ucumari via Flickr

A lot of borrowers haven’t faced up to the world economic situation and approach lenders wanting only to know what the current commercial mortgage rates are. In the interest of time, they ask the bottom-line question hoping to lock in the very best deal. Approval for a commercial loan has become much more complicated, and it’s no secret why. The government has instigated a huge bank bailout, unprecedented since the great depression.

In some cases, banks have seen their own credit rating drop, so the cost of their funds has increased substantially. So for banks still lending money on commercial deals, the rates in general have risen . Banks have increased their margins in order to make these loans more profitable and as a safeguard against future risk. Borrowers should be ready for intense scrutiny when applying for a loan, and have documentation prepared to show to the prospective lender. These new lending standards are tougher. The deal-breaker for an investor is having a probable loan tied up for months as the process grinds along, when more immediate funding is necessary. It’s a big waste of resources and time to go through the application, wait, and eventually be turned down, so your loan application should be clean and free of red flags.

To secure the most favorable commercial mortgage rates be totally candid with the lender no matter what the issue is. Be forthcoming about all bad or good news in the first meeting. This can get you meaningful answers and realistic quotes on probable commercial mortgage rates you can anticipate and plan with , and a good indication of if you will be able to finalize a loan from that lender . There are a lot of differences between residential and commercial loans and knowing what to look for can prepare you to approach the lender fully capable of producing the financial and business documentation needed to get your loan at the best commercial mortgage rates available. Doing the preparatory work now will benefit you financially for years to come.

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