Commercial Mortgage Lending vs Residential Mortgage Lending

http://LeahCoss.ca
Hi everyone, how are you? It's Leah Coss with the Mortgage Center. And I just wanted to do a quick description to help you differentiate what is a commercial deal and what is a residential deal when it comes to buying property or land.
Essentially, the first thing that's the easiest way to differentiate it is, how is it zoned? Is it zoned commercial? There's some places in Vancouver where you've got residential up above and then a commercial corner store or hair salon, [laughter] cash mart or whatever downstairs. So, you're buying essentially a commercial and residential property. But because it is on zoned commercial land, it is a commercial deal. Even if you're just buying the place up top.
OK. So, that's important to know. Check the zoning. Doesn't matter if you're living in it. Oh, another problem is different old commercial buildings down town. So, they used to be commercial warehouses that have now been converted into lofts. It's still zoned commercial. And these are huge headaches for people in Vancouver right now, wanting to buy them. They're zoned commercial, we gotta do commercial lending on it. So, sometimes there's some Grey area there, but it can make things complicated. So, it's something to be aware of when you are looking for a home.
The other way to differentiate is, how many suites is it? So, for example, if you're buying a full strata complex, which is a duplex, or a four plex, those are residential. Now, what about if you are buying one of those old mansions that have been converted into a six suite property? Well, now it's all of a sudden gone from residential to commercial. Once you go over four suites, it's a commercial deal, not a residential one. So, that's also something to be aware of.
I've been speaking to some people who are wanting to buy multifamily homes, and they've said, Well, you know, what threshold is best for us to stay within? And I always tell them, under four suites. Because, if it's under four suites, you still get the benefits and ease of a residential deal. If it's more than four suites, now you're dealing with commercial lending. And there's definitely more hoops to jump through, more equity and skin that you have to put into the property. You can't just do a five percent down.
So, those are some things to keep in mind if you're looking at investment properties or if you're looking for a home for yourself. Those are some hiccups that can come up along the way when it comes to commercial versus residential.
So, if you have any questions about commercial or residential or anything to do with your mortgage needs, give me a call. Leah Coss with the Mortgage Center helping you to understand your mortgage.

Category:

Howto & Style

Tags:

• commercial vs residential
• residential mortgage
• commercial mortgage
• commercial lender
• commercial mortgage lender
• commercial lending banks
• leah coss
• mortgage broker
• independent mortgage broker
• buying an old warehouse
• vancouver
• multi family home
• strata unit
• duplex
• four plex
• suites
• apartment

[doyouwannarollwithme]

Awesome video.