A commercial mortgage is a mortgage for a building that will be used for business. Commercial mortgages are like a residential mortgage, but can differ in a few ways. Commercial mortgages are a little riskier than a residential mortgage. They are not for someones home, but rather for business use, usually a start up business which in and of itself produces a risk to the lender.
Commercial mortgages require the same steps as a residential mortgage. However, with a commercial mortgage if the business has an established line of credit separate form the individual business owner, then the businesses credit is used to secure the loan.
Commercial mortgages can have a fixed or variable interest rate. A fixed rate will stay at the same percentage for the life of the loan. A variable rate will change as interest rates change. With a fixed rate the benefit is that a person will always know the cost of their mortgage payment, however, a variable loan allows a person to take advantage when rates drop, immediately.
Fixed rate mortgages though can be refinanced when rates drop and therefore the rate will be fixed at that lower rate. The choice can be difficult and should...
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