A small business mortgage is a commercial loan that is used to purchase commercial property. While many small business owners lease their office space, some find it more beneficial to buy it outright. And unless you are sitting on a pile of cash, there is a good chance that you are going to need a small business mortgage in order to do that.
To get a small business mortgage, you will typically need a higher down payment than you would for a residential mortgage. This can be as high as 35-50%. Fortunately, the bigger the commercial loan, the lower the interest rates usually are on the mortgage.
A commercial mortgage is a loan that is taken out on a business property. This may be a rental property, or it may be a property such as a storefront or industrial space. In some ways, commercial mortgages are similar to residential mortgages in that they are loans against collateral. In other words, the lender has the option of foreclosing on the property if the borrower defaults.
Entrepreneurs are vital to the economy of Ontario, yet sadly being a self-employed typically means that it will be more difficult for you to get a mortgage than if you are a T4 employee. Lenders often see self-employed individuals as being higher risk because their income can fluctuate dramatically from year to year. Fortunately, there are lenders out there who know how to look at the bigger picture, and with a little bit of work it is possible for entrepreneurs to qualify for a mortgage.
If you are looking for a way to access cash from the equity in your home, one of the ways to do this is through refinancing. Refinancing works by breaking your current mortgage and getting a new one for more than you currently owe your present lender. The additional amount is paid to you in cash and you can use that money for whatever you see fit. Many people choose refinancing as a way to pay for large expenses such as home renovations or to consolidate their debt.
One advantage of refinancing is that interest rates are usually much lower than they are on other types of loans. And with the current five year fixed rate being at its lowest point in over two years, now is a great time to take advantage of this mortgage tool.