What are the qualifications for a corporate mortgage?

Mortgages secured for commercial real estate are offered to corporate, investors and any business entities. They use these mortgages to purchase rental property, buy land and start up or boost their businesses. If your corporation is seeking to get a mortgage, they can apply in commercial banks. Commercial banks are the biggest lenders of mortgage to corporate. Even so, getting a corporate loan is not as easy as it seems. Here are the requirements for corporations who want to apply for a mortgage.

When banks are looking to approve mortgage request, they check the corporate credit card history and report. If your credit history is good you are more likely to get your loan approved. If your corporation has un-cleared loans, you are most likely going to miss out on good mortgage deals. Even with a bad credit score, most commercial banks will approve a mortgage request but you will pay a higher amount in interest. Before your corporation applies for a loan, make sure you have cleared all your debts and your credit history is good to get the maximum benefits of a good credit. Banks offer lower interest rates for good credit histories; they trust you more because they feel you are capable of clearing the mortgage as per the agreements.

You have to provide your asset and Liability statements to the banks before they approve your corporate mortgage request.  For personal mortgages, lenders may ask for the title deed of the property being sold as collateral but it is different when it comes to corporate mortgages. The lender is required to have some of your assets as collateral. When you fail to make the mortgage payment, they will have the right to take the property. The price value of your assets should be similar to the mortgage you received. It should be enough for the lender to cover the losses they incurred when your real estate fails. Corporate savings may also count as assets to mortgage lenders.

Lenders compare the current cash flow of your corporation to the amount of mortgage you are applying flow. Most lenders give out mortgages to corporations with a total income that is at least 20% higher than the amount they have in debts and credits.  You must provide verified documents of your total income, monthly expenses and total debts. The lender will also look at the cash flow for the past few years. If your business is new, you are not likely to receive a mortgage form most companies.

In case you are borrowing loans for rental commercial real estate, the rent you will receive from the property is taken into account when you apply for a mortgage. The money is calculated together with the cash flow to determine how much mortgage you qualify for. If your corporation defaults the mortgage, the lender is entitled to the rents and profits of the real estate. The qualifications may be set high Corporate mortgages can be good when you are looking to develop an existing business or have enough money in your corporation to start a booming business.