Commercial Purchase

Commercial Purchase

A commercial mortgage is a loan made using real estate as collateral to secure repayment.

A commercial mortgage is similar to a residential mortgage, except the collateral is a commercial building or other business real estate, not residential property.

In addition, commercial mortgages are typically taken on by businesses instead of individual borrowers. The borrower may be a partnership, incorporated business, or limited company, so assessment of the creditworthiness of the business can be more complicated than is the case with residential mortgages.

Some commercial mortgages are nonrecourse, that is, that in the event of default in repayment, the creditor can only seize the collateral, but has no further claim against the borrower for any remaining deficiency. The general reason for this is twofold: many laws significantly prevent the creditor from going after the borrower for any deficiency, and mortgages structured for sale as bonds give a higher priority to constantly receiving some sort of income and therefore require a clause which allows the lender to take the property immediately, regardless of bankruptcy proceedings that the borrower might be going through.

Frequently, the mortgage is supplemented by a general obligation of the borrower or a personal guarantee from the owner(s), which makes the debt payable in full even if foreclosure on the mortgaged collateral does not satisfy the outstanding balance.

logo

Locations

BRE BROKER LIC# 0065444
Privacy Policy

Pacific Mortgage Exchange, Inc.

760-779-5556
73241 Hwy 111
Palm Desert, CA 92260

Disclaimer: The content of this site simply provides general information for the consumer. It should not be considered legal advice, guidance, or gurantee of an offer of a loan or financing. This site may include links or references to third-party sites, resources, or content. These parties are not endorsed by Pacific Mortgage Exchange, Inc. nor is the accuracy of their information.