Assuming a commercial loan pros and cons

[Mike Stock]

What are some pros and cons of assuming a commercial loan from a seller? Is this a better option than seeking my own finance? Would banks still do an updated appraisal? Regards, Mike Stock

[Roy N.]

@Mike Stock

I'm not familiar with the specifics in your jurisdiction.   Here if the commercial note/mortgage is assumable, the leases are solid, the business is performing, the buyer checks-out, the lender can be persuaded that an assumption is in their best interest.  If the interest rate is lower than current rates, they would be less inclined, if it were higher then their motivation may be greater.

Here mortgage terms are shorter (typically 5-years), so there is little chance the lender would order a new appraisal unless there compelling circumstances (i.e. the Vendor had completed a major upgrade to the property since the mortgage was subscribed).  In your country, mortgage terms tend to be considerably longer, so the lender behaviour in this respect would be different.

@Joel Owens or @Bill Gulley would be able to provide more relevant experience.