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Commercial Real Estate mortgage
A Commercial Real Estate Mortgage is a loan made on real estate collateral, other than a residential property, in which a mortgage is given to secure payment of principal and interest, or just interest alone.
A commercial Real Estate mortgage is similar to a residential mortgage, except the collateral is not a residence, but a commercial building or other business real estate.
Typically the real estate mortgage is arrange by a business. Because the business may be formulated as a partnership or limited company the assessment by the lender as to the creditworthiness of the business is more complicated.
The length of the loan usually runs from 5 to 30 years.
Collateral
Examples of commercial real estate include: Shopping centers, industrial buildings, office buildings, golf courses, resorts, hotels, parking garages, car washes, retail stores.
Why use a Commercial Real Estate Mortgage
Common applications of commercial real estate mortgages include: construction of a new building, purchase of premises, expansion of facilities or modification of existing premises.
Commercial Real Estate mortgage Interest rates
Interest rates are usually higher than for a mortgage over residential property.
The most common variant of commercial real estate mortgages is a fixed rate commercial mortgage where the interest rate remains constant throughout the term. Loans can also be variable or capped.
A second commercial real estate mortgage is an additional loan on a commercial property secured behind that of the first lien.
Wikipedia Commercial mortgage loan
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