Are you willing to buy a commercial premise? Extend your existing business property? Or simply invest in some commercial project? Then, applying for a mortgage SME Business Finance is a wise thing to do. Commercial mortgages generally have a lower rate of interest as compared to the other business loans.
You can extend the loan period for a number of years and repay the money when it is most suitable for you. Since, the loan has so much to offer, applying for mortgage finance is indeed a cool decision for every small or medium sized enterprise owner. But make sure to ask your lender few questions before submitting the applications.
Few Questions To Ask Your Lender Offering Mortgage SME Business Finance in India
- What Is The Interest Rate? Just asking about the rate of interest isn’t enough. Ask your lender about the loan estimate which includes his fees, interest rates, and the APR (annual percentage rate). This APR consists of the points, fees, interest rate, or any other charge you have to pay for the loan.
- How Much Will You Charge As The Closing Costs? You will have to pay a certain amount at closing as a charge for the services offered by your lender or for any other party involved, like the title companies. Make sure your lender provides you with a written estimate clearly stating the closing costs after receiving your application. The maximum time they should be requiring to prepare this estimate is 3 days.
- Can I Lock The Interest Rate? Before applying for the mortgage, ask your lender when can you lock the interest rate and how much do you have to pay for it. Locking the interest rate is vital since it might fluctuate from the time you have applied for the loan and the closing date. If you can predict that the interest rate will hike, it is advisable to lock it and the points.
- Is There A Chance For My Loan Approval To Get Delayed? There are various reasons for which a loan approval generally gets delayed like job change, change in your marital status, new debt, increasing or decreasing salary, or fluctuations in your credit history. The best is to place your financial status in a dormant pattern till the closing table is reached.
- Do You Charge Any Prepayment Penalty? Some financial institutions offering Mortgage SME Business Finance in India charge an amount as penalty for mortgage repayment. So if you are planning to reduce or refinance your principal amount within the next few years, make sure to ask about the prepayment penalty. Enquire about the penalty specifications and whether the lender will lower the interest rate if you opt for a loan with a penalty.
With so many companies Mortgage SME Business Finance all over India, make sure to compare the services offered by each. Doing so will definitely help you choose the ideal SME mortgage provider.