Commercial mortgages provide a dependable source of funding as real estate properties secure these debt instruments. But do you know the common mistakes of applying for one?
With fraud being so prevalent in the mortgage business, it’s very important to be aware of carefully familiarizing yourself with dos and don’ts in mortgage lending. Provincial Bank shares four examples of what not to do if you plan to secure business mortgage loans.
You Move From One Residence to Another
Lenders strictly review this information as part of the approval process, since it’s logical to convince the mortgage company that you will be physically reachable.
No Proof of Income
If you’re self-employed and your business is new, chances are your application will be tossed into the “reject” list. It’s highly recommended waiting it out for a year and a half for your business to be in operation.
However, don’t expect to receive a large sum even if your business has been running for a few years. Mortgage companies implement different systems for knowing how much they plan to shell out.
Much of the trouble for getting a mortgage loan can also begin by the company not doing their homework. Make sure the company does a complete spot check on a list of providers of business mortgage loans.
This is particularly important since fraud risk remains widespread in the capital offering. On the contrary, Interthinx’s Annual Mortgage Fraud Risk Index issued in summer 2015 found that there was a 4 percent decline in fraud risk for 2014, noting that fraudulent identity is one of many vulnerabilities for applicants.
Using Payday Loans
Banks and other commercial lenders may reject your application for a business mortgage loanas this type of borrowing reflects your way of handling finances. It most likely gives lends an impression that you’re often unable to make ends meet within a month, or do not have financial contingency plans in case of emergencies.
Make a conscious effort not to do any of these things and you stand a much higher chance of getting your business mortgage approved.