Unlike residential real estate, purchasing a commercial property in Florida, or anywhere in the country for that matter, requires a larger amount of mortgage loan. Florida commercial real estate properties have their own set of mortgage loan, and the rates also differ. For starters, lenders typically base the interest rate on the rate the bank offers to worthy and credit-sound borrowers, and large corporations; this basis is also known the prime rate.
Prime Rate
If in case you found the right lender for your Florida commercial real estate property, you should know that he will generally include a specific percentage of the total loan amount to the prime rate. The percentage can be anywhere between half a percent to several percentage points. Furthermore, there are several factors that can affect the mortgage rate, including: down payment, life of the loan, property’s location, and risk level.
You don’t have to worry, however, if you’re only eligible for a high-interest mortgage loan because you have the option to refinance your Florida commercial real estate mortgage once your business develops in the future. Refinancing is usually done with another lender. Moreover, this can easily entitle you to a better interest rate but entails the usual fees associated with new commercial mortgage.
Other Costs:
1. Environmental surveys – this additional cost is normally associated with properties that carry tremendous hazards and dangers. Dangerous properties, e.g. gas station, generally involve stricter inspections.
2. Valuation – this cost refers to the amount you need to pay for the appraisal. The price is normally contingent to the size of the property. Empty lots also usually cost a lot more to appraise.
3. Due diligence – before getting approved for the mortgage, your lender will usually investigate your financial health, which includes your credit worthiness and other background checks.
4. Other fees – broker fees and legal costs also accompany your mortgage. For the former, you have to allocate half to two percent of the loan amount as payment for the rendered services. Lawyer costs, on the other hand, are always part and parcel of the purchase, if you want to ensure that everything is performed correctly and legally right off the bat.
Aside from those, you must be ready to pay for application and processing fees for the mortgage of your Florida commercial real estate. Fortunately, these types of fees are usually refunded during closing, since lenders only impose them to check the borrower’s dedication.
Mark Michael Ferrer
Florida Commercial Real Estate
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