You are here: Home \ You are here: Home \ Mortgages \ Commercial

What is a commercial mortgage, or ….

when does a residential mortgage become a commercial one?

The obvious answer is when the real property is used or zoned for business (commercial, industrial or institutional) purposes, the mortgage on that property will be considered a commercial one. With the odd exception, most residential mortgage lenders will not lend on rental properties with more than four rental units. Mixed use properties (usually those with street level retail spaces and apartments on top) are definitely considered non-residential.

If you only have a few residential investment properties and your main source of income is not from rents, then you may be able to qualify your rental properties for residential mortgages at low rates. A portion of the rental income can be included in your family income for qualification purposes. Or it can be used as an off-set in the calculation of your debt servicing ratios.

When it come to commercial rates, you can refer to my mortgage rate sheet. Commercial fixed rates are usually based on a spread over Canada Bond rates for the same terms. As a ball park figure, they are about 1% above the posted residential rates for high quality deals. Lenders usually charges a fee of ½% for the best deals. For non-conforming deals, rates and fees will be higher.

To qualify for a commercial mortgage, a no-brainer is 65% LTV and 125% debt coverage from cash flow. The world is never that perfect. I am a specialist in non-conforming mortgages. I can get you higher ratio financing, up to 80%, if you and the property qualify. So please write me, if you need help. I can always get you the best deal that suits your needs.

I can also arrange financing for your development project or your business needs.

CANADIAN MORTGAGES eBook

Learn More about my latest FREE Canadian Mortgage eBook!

Connect with me on…

LATEST NEWS

Bond Yields is Rising

Some of you, like me, may be pleased to note that the 5-year Canada Government Bond closed at 2.495% earlier this afternoon, an increase of 3.02%. In fact bond yields have been rising since mid-October, when the second round of quantitative easing (QE2 – No Virginia, that is not a ship) was implemented by the US Fed. [...]

Rising Yields is a Good Sign

CREA Cartel not Broken Yet

Buying or selling a house is a big deal. Most people thus seek expert advice and assistance. That advice comes mainly from real estate agents, who are represented by the Canadian Real Estate Association (CREA). Until now, however, the system has been designed to serve agents, and the brokers who employ them, at the expense [...]

CREA fought tooth and nail to keep its tight grip on fees

Canada’s Balance Sheet & Economic Advantages Mitigate Household Debt Risks

Today, the Scotia Bank released its latest Economic Special Report. See below. It’s worth a read. However, I think the report is unduly optimistic. Read between the lines in the section on Households. I am not that reassured. I think Canadian households will have to continue to trim back in order to handle interest rates [...]

There is understandable concern about the rapid rise in borrowing

TESTIMONIALS

C. Steinke

"The level of service provided by Leo is exceptional! Everything from the initial contact through to the closing agreement. I especially appreciate the ongoing follow-up that he provides still to this day (four months after the fact). I think he's magical:) I definitely hope to work with him again the future and highly recommend him to anyone requiring an exceptional level of service."

N. Waggoner

"I had never considered using a mortgage broker before - I had always just accepted the rates offered by the charter banks as the best ones available. Leo found me a better rate than the one being offered by my bank, and the loan officer had to match it to try and keep our business! Leo continued to keep me informed of the best rates available, and offered me all kinds of insight on how to get the most for my money.

Although I decided in the end to stay with the bank, I definitely benefited from Leo's advice, and would recommend his services to anybody considering a mortgage."

Victor R. Eng

"I was surprised and prepared to jump through a lot of red tape and hoops, when Leo said that the mortgage was done. With his experience and track record, the Brokerage firms ( Time is money ) accepted his proposal without questions and all done within 24 hours period. As the interest went down before the closing agreement, Leo got a further reduction in the mortgage. The Deal was done, but he was willing to go the extra mile.

I have gone through many mortgages and the difference in his service is ‘night and day’. Leo has gained a Friend and a lifetime client."

Rob Angus

"When I needed financing for my commercial building I was stuck . . . it was a 'tweener,' too big for the residential lenders, too small to interest the big banks.

Leo Lee took on the task. It wasn't easy, but he stuck with it until he found the right lender. I recommend Leo - he's tenacious, creative and he gets the job done."