A commercial mortgage can be used to finance both investment properties and owner-occupied commercial properties. The key difference between the two is the intended use of the property.

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In the case of an investment property, the property is purchased with the intention of generating income through renting, leasing, or capital appreciation. Examples of investment properties include apartment buildings, office buildings, retail spaces, and warehouses. With an investment property commercial mortgage, the lender will typically look at the income potential of the property and the borrower’s ability to repay the loan, based on the projected rental income or other revenue streams.

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On the other hand, an owner-occupied commercial property is a property that is purchased for the business owner’s own use. Examples of owner-occupied commercial properties include office buildings, retail spaces, warehouses, and factories. With an owner-occupied commercial mortgage, the lender will typically look at the borrower’s ability to repay the loan based on the cash flow of the business, as well as the value and condition of the property.

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It’s important for borrowers to carefully consider the terms and conditions of any commercial mortgage agreement, including the interest rate, repayment terms, and any fees or charges, to ensure that the agreement is a good fit for their financial situation and business needs. Borrowers should also be aware of the risks associated with taking on debt to finance a commercial property, and should have a clear plan in place for managing and growing their business to ensure that they can meet their financial obligations over the long term.