Commercial Property Loan is extended for purchasing a ready to move-in or under construction office or retail space by mortgaging the same to the bank.
The amount of loan is decided by the bank on the basis of income of the customer and the purchase value as well as market value of the property. The property to be purchased should legally and technically be acceptable for the purpose of creating mortgage.
The most important factor in commercial property purchase loan is lower LTV ratio (the ratio of the required loan amount to the actual value of the property being purchased). For the purchase of under construction properties, the property is required to be of an approved developer.
One of the key conditions put forth by the banks for giving office purchase loans is:
The amount provided under this loan is 60 to 70 per cent of the market value of the property. However it can be different depending upon the policies of different banks.