What’s the Difference Between Residential and Commercial Mortgages When It Comes to Foreclosures?
If you live in New York and are interested in real estate investing, you may be able to use a commercial mortgage on an investment property. But if things go wrong, there are specific differences between the foreclosure process of residential and commercial mortgages. Residential vs. Commercial Mortgages Residential mortgages usually offer better rates and terms, so commercial mortgages tend to be only used for commercial ventures. However, there can be areas of overlap: When you want to buy a residential structure (up to four units in the building) to use as a rental property When you want to hold your primary residence in your company’s name If you want a short loan term – Typically commercial loans are shorter term; 1-5 years is not uncommon If you have a tough time getting personal financing due to bad/no credit or lack of documentation. Commercial mortgages do not involve as much documentation as long as the collateral value and property income c...