CRE loans work similarly to personal mortgages. They are structured as term loans to be repaid over a set period of time, with interest, and are usually secured by the property being financed.
Currently rates range from 3% to 20%, depending on the exact type of loan, property and your personal financial profile. The repayment term may also be shorter for CRE loans, meaning they can be a bit more expensive than residential loans.
Similarly to residential mortgages, CRE loans come with closing costs.
Owner-occupied commercial real estate loans
Investment property commercial real estate loans
Commercial real estate loans for investment properties are loans specifically designed for businesses that don't intend to occupy the property they are purchasing. Instead, the property will be leased to commercial or residential clients to provide rental income to the business.
Commercial construction loans
Speculative construction loans
Speculative construction loans are a type of commercial construction loan that involve financing new construction, such as homes or commercial spaces, without having upfront buyers or tenants.