What is a Commercial Mortgage

Your Mortgage Matters by Vancouver Mortgage Broker Rebecca Awram

COMMERCIAL MORTGAGES

A commercial mortgage is one in which you are not borrowing for your owner-occupied residence or for a small rental investment (typically 1-4 units). Residential mortgage financing is incredibly simpler and cheaper than commercial financing. Therefore, whenever a client calls me for a commercial mortgage, the first thing I ask is if they have any room to borrow on their owner occupied residence. It is less expensive and the document requirements far simpler.

Determining the credit-worthiness and revenue of a business is substantially more complicated than that for an individual. Also, commercial terms are typically different from residential terms , and often incorporate a shorter amortization with ‘balloon’ payments at the end (although not always). They are considered riskier and accordingly come with higher interest rates.

Dominion Lending Centres Commercial has established excellent relationships in the lending community with pension funds, banks, credit unions, life insurance companies, trust companies, private institutions and individual investors. These relationships allow us to identify the source of funds for a commercial mortgage which will be most likely to meet the needs of our borrower clients.

Commercial real estate financing transactions are often very complex, but our team has extensive experience and we are experts at structuring transactions that work optimally for all parties concerned. Our commercial mortgage professionals facilitate a smooth process which begins with initial discussions and ends with a timely and problem free funding. In order to attract the best commercial financing possible, each situation is presented effectively and professionally.. Dominion Lending Centres Commercial has the resources and the knowledge to prepare and underwrite a broad variety of transactions, and present them to commercial lenders with computer modeling, visual aids, written presentations and ancillary information.

TYPES OF COMMERCIAL MORTGAGES

1. Commercial Term Mortgages

A mainstay of Dominion Lending Centres Commercial’s financing business is negotiating long-term commercial mortgages for apartment buildings, shopping centers, office buildings and industrial properties. Our commercial brokers are always looking for innovative ways to minimize the cost of funds and meet other unique needs of the borrower such as limited guarantees, funding prior to lease-up and the fixing of interest rates prior to the completion of development projects. Our institutional clients provide the most economical long term financing in the marketplace on both conventional and CMHC insured product.

2. CMHC Insured Mortgages:

Dominion Lending Centres’ commercial brokers are experts at securing mortgage financings direct from CMHC. These insured financing offer considerable savings to the borrower in that it often offers a much lower overall cost to borrowing.

CMHC will insure the following types of construction loans:

• High-rise & mid-rise condominiums
• Freehold properties (single family home developments, townhouses etc.)
• Apartments/condominiums to be built for rental purposes
• Retirement & Nursing home developments
• Mixed use property development, where the residential component represents at least 80% of the overall project.
• Student housing developments.

3. Construction Financing:

Our commercial mortgage brokers have arranged construction financing for some of the largest projects in the marketplace. Our expertise in construction financing extends to both conventional loans and those insured by Canada Mortgage and Housing Corporation.

4. Mezzanine/Secondary Financing:

Our commercial mortgage department also has in-house funds for mezzanine and secondary financing to suit our clients’ needs. In some case we are able to fund up to 100% of the costs for a project. This access to our in house funds and funds across Canada allows us to respond quickly to market demands and client needs. Whether it’s a small commercial term deal or large construction facility, we have the ability to provide the funding our clients need.

5. Care Facilities and Seniors Housing:

This is an expanding field and our commercial lending team has experience in financing all types of senior housing and health care facilities. The types of financing we arrange include long-term commercial mortgages, construction financing, equity and secondary financing. By combining our understanding of the capital markets with our knowledge of this unique industry, we can secure the lowest interest rates with the most favorable loan terms.

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