Published 6 December 2006
Strata Funding Ltd (Alan Robertson) has introduced a new mortgage product aimed at giving commercial property investors both long-term funding & true low deposit options.
It offers funding of up to 75% of registered valuation at highly competitive rates based over periods extending to 30 years.
Mr Robertson said: “Traditionally, many investors have been faced with finding substantial equity when purchasing commercial property. Many lenders will only fund between 50-65% of the property’s cost, requiring the purchaser to find substantial sums in cash equity.
“In addition, most loans for this type of funding are set for a 10-year term. Typically, a requirement will be that it is fully paid off over 10 years. While repayments will be structured over the entire period, the loan term is more likely to be set at 5 years, with renewal at the lender’s discretion.”
He said this longer-term mortgage facility would make a significant difference to commercial property investors’ planning: “To have a true 30-year term really strengthens the borrower’s position. A further real advantage to the loan is that it can be established with as little as 25% deposit â€“ making a very real difference to the viability of any commercial property investment â€“ especially for those investors seeking to build up a portfolio to hold for the long term.”
Mr Robertson said the facility also had a stand-alone security structure and, with the low deposit requirement, investors could avoid tying up all their capital.
Strata has obtained the funding line through a listed company and will offer loans from $200,000 up to $5 million.
Attribution: Company release, story written by Bob Dey for this website.