Commercial Property Loan? How does it differ from residential mortgage?
Policy for loan on commercial properties is usually at maximum of 80% of the value of property. However, there is no limit of how many commercial property. The percentage loan-to-value also varies with types of property as well. For example, shops may get 80%, while SOHO may get 70%. You can have 2 shops at 80%, 2 SOHO at 70%, all up to the bank to decide.
Major thing about commercial property is the risk involved. Usually, banks have different risk appetites for different commercial property types. So, ranging from commercial land, factories, shops, SOHO, service suites, offices, schools, clubs, football field, etc. all are different.
Then, one question always pops up – can I buy as sole proprietor or partnership? Can I use my company to buy?
This we will discuss tomorrow.