At the time we are writing this, mortgage rates have just hit a 22-year high. If you are in the market for commercial real estate now or during another time when rates are high, you may be wondering what you can do to help minimize them when you apply for your mortgage. Let’s go over some quick tips.
Minimizing Commercial Mortgage Rates
- Borrow what you can afford. A good starting point is not to bite off more than you can chew. Borrowing higher amounts of money entails more risk, resulting in higher mortgage rates. Try and pick real estate that you can afford, and not purchase more than what you really need. This will help you to keep your rates down.
- Be selective about the property. The property you are buying may also be seen as risky in some circumstances. To minimize the risk, you are better off buying a finished structure, for example, than one that is still being built. Your rates will be lower. Rates also are likely to be lower when buying real estate that is in a safe area, rather than a property situated on a flood plain or in a bad part of town, etc.
- Improve your credit score. Your credit score is as important when applying for a commercial real estate loan as it is when you are buying a residential property. Boost your credit score before you apply for a commercial mortgage if you can.
- Make a larger down payment. Another rule of thumb that is the same for commercial and residential mortgages is that your mortgage rates are likely to be lower when you put more money down on the property upfront. If you can afford a larger down payment on your commercial real estate, it may be worth it in terms of the interest it will save you over the lifetime of your loan.
- Work with a mortgage broker in Florida. Instead of shopping around for deals on your own by going from one direct lender to another, think about working with a mortgage broker. A broker can shop around to bring you competitive rates quickly, and might even find commercial rates for you that you would not have access to without their referral.
Get In Touch With Your Local Mortgage Broker
Lending Bankers Mortgage is based in Miami, and has a network of lenders throughout Florida. We have extensive experience with commercial real estate loans, and can give you recommendations that will help you keep your rates as low as possible. To schedule your consultation now, please give us a call at (786) 220-1100. We can work with you in the Miami area or anywhere in the state of FL.