Commercial and residential property
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Commercial and residential property financing: see the differences

When we think about the differences between a commercial and residential property, we note that the purpose of using the property defines many things, such as size, location and cost of acquisition.

Therefore, we are talking about different real estate products, aimed at different audiences. However, both a businessman and a family man have a common difficulty: pooling the capital needed to buy the property.

So it wouldn’t be surprising if these people resorted to real estate financing, would it? After all, both may be in a hurry to buy the house, land, shop or apartment they want.

Are the conditions offered to these two audiences similar? What changes? Is it really advantageous to finance a property?

To find the answer to all these questions, follow this article to the end!

Commercial and residential property: what is the advantage of financing?

Let’s start from the point of view of an Individual: he needs to live somewhere. Therefore, those who do not have their own property and do not live in the home of a family member or friend have to pay rent.

As we know, the tenant does not invest the money spent on housing, but pays to use a service. In some cases, this is advantageous. If you are, for example, moving to study for two years in a city, it does not make sense to buy a house in the municipality.

However, if you are already stabilizing your family life, financing a property can be advantageous, since the value of the installment comes in place of the rent. In addition, this is the possibility to invest in a property that can be sold or rented in the future.

Headquarters, buy or rent?

Now, looking at this issue from the point of view of the entrepreneur, it is necessary to be even more analytical. If your company is taking the first steps, it may be safer to rent the store.

This will cause the business to use proceeds from this purchase for other purposes, such as maintaining working capital, investing in machinery or contracting, etc.

In addition, with the rented property, the entrepreneur has more freedom to move his business address, if he identifies that the location is not ideal for the business.

On the other hand, if the rented property is strategic for the good functioning of the company, it may be a good idea to buy it, since leaving the site can pose a risk to the business.

Finally, remember to evaluate the prospects for valuing this investment. This tip also applies to Individuals.

What are the characteristics of home financing?

There are two real estate financing systems that can be used for this type of purchase: the Housing Finance System (SFH) and the Housing Finance System (SFI). We will focus on SFH because it is the most popular.

Through this modality, you can buy a property of up to R $ 1.5 million. For this, it is necessary that you live or work in the same city where the property is located. In addition, it needs to be your first property to be acquired in the city.

You can use your FGTS balance to enter the financing, as long as you have not used this option in the last three years to be able to buy another property.

The maximum amount that can be financed is equivalent to 80% of the property, including costs with taxes and fees. The average amount of interest charged is around 10% per year. It should be noted that this type of financing only covers urban and residential properties.

What are the characteristics of commercial financing?

This credit line is usually more expensive than the one used in housing financing. However, it is important to clarify that this type of financing can be cheaper than borrowing money from other modalities.

Both an Individual and a Legal Entity can use commercial real estate financing (SFI). Despite this, the use of FGTS is not allowed in this system.

In addition, there is no maximum amount for a property to be financed and the entrepreneur can finance up to 90% of the property. However, it is important to remember that this maximum ceiling varies from financial to financial.

In housing financing, there is a maximum limit for the portion of monthly income that can be compromised, usually 30%. In commercial real estate financing governed by the SFI, this requirement does not exist.

This means that the consumer can pay higher installments, taking less time to repay the loan. The deadline for discharge is 35 years (420 months). Currently, the average interest rate ranges from 12% to 16% per year.

What is the importance of credit simulation?

Both an ordinary consumer and an entrepreneur need to understand how the purchase of a commercial and residential property impacts personal and business finances.

Credit simulation can help, as it shows the monthly fee. In addition, by talking to a financial advisor, the client can understand how these installments are composed and what can be done to reduce these amounts.

This can help the interested party to define the value needed to enter the business. In the case of an ordinary person, this information will make him rethink his expenses and save money to be able to buy his own home.

An entrepreneur can decide to wait for another moment to carry out the financing, considering the metrics of his business and the expectations related to him.

Finally, the simulation helps the bank to choose the credit line that best suits its profile, regardless of whether it is personal or business.

As we have seen, the differences between a commercial and residential property go beyond the size of the property. The financial market offers different options for obtaining credit for these goods, since the purpose of the use is different. It is worthwhile for the entrepreneur to research the real estate options available in his city.

In this article, we talk a lot about real estate financing. If you want to understand how these installments are calculated, continue here on the blog and read our post on how the financing amortization works.

The post financing commercial and residential property: see the differences appeared first on Blog CrediPronto.