Question:

Is commercial mortgage insurance required?

Answer:

Most often, commercial mortgage insurance is not required. Rather, commercial mortgage lenders will require that around 10% of the commercial project cost in cash or approved securities is held under the name of the lender until the commercial project reaches a pre-approved stage or is completed.

Commercial loans are not extended via rigid borrowers' credit history and income examination; rather, they are made upon evaluation of the commercial project cash generating ability. Even though commercial mortgage insurance most often is not required, certain commercial insurance policies are necessary to protect the owner in many cases.

Recommended Insurance Coverage for Commercial Mortgage Properties

  • Property Liability Insurance

    It is recommended that you purchase liability insurance for your commercial properties just in case someone suffers an accident or loss on your premises and decides to sue.

    Also, It is possible to take title of the commercial property in your own name, but it is highly recommended the title goes to an LLC (limited liability company), or a corporation. Thus, your personal liability and assets will be much better protected.

  • Title Insurance

    Title insurance coverage insures the owner of the commercial property against past title defects. Sometimes a borrower may decide to pursue a commercial mortgage property purchase even if title discrepancies are visible. Legal help is essential to properly evaluate the risk.

Recommended helpful present and future homeowners links:
Why: Refinance to a fixed rate loan while mortgage rates are still low.
Link:
Why: Because FHA loans are insured by the US Federal Government they have very competitive interest rates and are easier to qualify.
Link:
Why: Know and protect your credit report and score.
Link: See All 3 National Credit Scores & 3 Reports Instantly, Online & Free
Why: Find your next home and save money.
Link: Search thousands of foreclosures. Free 7-day trial.
Link this QnA Print del.icio.us Digg
Was this Mortgage QnA helpful?
Not at all
  • Currently 3/5 Stars
  • 1
  • 2
  • 3
  • 4
  • 5
 Definitely
Add to this Answer

Mortgage QnA is not a common forum. We have special rules:

  • Post no questions here. To ask a question, click the Ask a Question link
  • We will not publish answers that include any form of advertising
  • Add your answer only if it will contrubute to the quality of this Mortgage QnA and help future readers
If you have trouble reading the code, click on the code itself to generate a new random code. Verification Code Above:
Bookmark and share this QnA:

Common misspellings: mortage and morgage