Central Mortgage Blog

Unlike residential lending, commercial investment properties are viewed more conservatively. Most lender’s will require a minimum of 20% of the purchase price to be paid by the buyer.
The remaining 80% can be in a form of a mortgage provided by either a bank or mortgage company. Some commercial lender’s will require more than 20% contribution toward the purchase from the buyer.
What a bank/lender will do is subject to their appetite and quality of buyer and the property. Loan to Value is the percentage calculation of the loan amount divided by purchase price. If you know what lender’s LTV requirements are, you can also calculate loan amount by multiplying purchase price by the LTV percentage.
Keep in mind that purchase price must be supported by an appraisal. However, in the event the appraisal shows a value less than the purchase the lender will determine the loan amount on the lesser amount.