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This mortgage calculator can be used to figure out monthly payments of a home mortgage loan, based on the home's sale price, the term of the loan desired, buyer's down payment percentage, and the loan's interest rate. This calculator factors in PMI (Private Mortgage Insurance) for loans where less than 20% is put as a down payment. Also taken into consideration are the town property taxes, and their effect on the total monthly mortgage payment.
Commercial mortgage loans are used when purchasing structures
such as office buildings, apartment complexes, health care
facilities and retail outlets. Whether it’s a hi-rise tower or a
family-owned restaurant, buyers typically need additional
funding to complete the transaction. Commercial mortgages are
what they pursue.
Similar in many ways to residential loans, commercial mortgages
require far more paperwork. Both types of loan require that the
properties being purchased undergo a thorough appraisal. Both
require collateral to secure the loan and protect the lender
against default.
Like residential mortgages, commercial mortgages can be
refinanced to take advantage of more favorable terms, or they
can be re-mortgaged to establish a line of credit to use for
running the business. And like residential mortgages, the lender
will hold the deed to the property until such time that the loan
is repaid in full.
During that time, the lender makes money off the interest on the
loan. If the borrower fails to make payments on the commercial
loan, the lender has the right to initiate foreclosure
proceedings and take the property. Remember, the property likely
is what will be used as collateral. The interest paid on the
commercial mortgage usually is tax deductible; just be sure to
consult with a professional first.
When you apply for a commercial mortgage, you will typically be
offered two different types of loans: fixed rate loans and
variable rate loans. These work the same as they do for
residential mortgages.
On a fixed rate commercial mortgage, the interest rate that is
negotiated and agreed to remains in effect until the loan is
fully amortized. If you’re obtaining a commercial mortgage and
interest rates are heading higher, a fixed rate likely is a
better option. You can always refinance your mortgage should
interest rates go lower than your fixed rate.
With a variable rate commercial mortgage, the interest rate will
fluctuate during the payback period. Interest rates are
determined by the US Federal government. Make sure you
understand how variable rates are determined. Also, find out
from the lender how often the rate on a variable rate mortgage
will change. It’s fine as long as the interest rate is
decreasing; it’s the increases that you need to worry about.
Make sure, too, that should the interest rates increase, you can
still afford the monthly payments. With some variable rate
loans, the rate is fixed for the first few years, and then
converts to a variable rate loan.
When applying for a commercial mortgage, also ask about the
Early Redemption Charge (ERC). Remember, lenders make money off
the interest on the loan. When the loan is repaid in full sooner
than anticipated, the lender loses money. To avoid losing money,
lenders often include an ERC which can amount to a substantial,
one-time sum. If you discover an ERC in the fine print, try to
negotiate it away. If you’re not successful, take your business
elsewhere.
Applying for a commercial mortgage means that you’re about to
make a serious investment. Be sure you know exactly what you’re
signing before you sign the documents. You have a right to ask
questions, renegotiate more favorable terms and do whatever else
you feel is necessary. It’s your money and your future. Good
luck!
About the author:
Commercial Lifeline are Commercial Mortgage
and Bridging Finance specialists.
Download our free Commercial Mortgage guides by visiting our
Commercial Mortgage Guide page.
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