Commercial Real Estate Mortgages

There are many types of commercial real estate mortgages. Deciding what type of financing you need or want depends on many factors. One of the most important factors is your exit strategy. If you plan to buy and maintain a mall for a long period of time, consider a long-term loan with a fixed interest rate. 

If you are looking to buy a home and your strategy is to sell it quickly, consider a loan with a low down payment and a low interest rate. Here are the most common types of mortgages and the best ways to use them:

Long Term Loans – These loans have maturities of up to 10 years, are fixed-rate loans, usually have a prepayment penalty and are usually amortized over 30 years. To know more about real estate mortgages, you can contact this site https://taylormadelendingllc.com/.

 

Short-Term Loans – These loans typically have maturities of up to 3 years, have lower interest rates than long-term loans, and are usually amortized in less than 30 years. This commercial property mortgage may be right for you if you are looking to sell your property on short notice and will usually cost you less because there is no upfront penalty.

Conduit Loans – These mortgages typically have low interest rates, long repayment terms, and can be non-recourse loans. No recourse means that you are not personally responsible for the loan. They do well for stable properties with credit-worthy tenants.

Small Business Administration Loans (SBA) – These loans are SBA insured, come from SBA approved lenders, and have some of the most affordable terms, such as low down payments, longer loan terms, up to 40 years of amortization, and low interest rates . Most of these loans are given to owners who occupy at least 51% of the property and can be used as home loans if you occupy at least 60% of the building.

Construction Loans – This type of financing is designed to finance the construction of a project to completion or to lease it up to a certain percentage. These commercial real estate mortgages are typically drawdowns in which the lender provides funds while the project is being built, makes only interest payments, and usually takes one to three years to complete. They usually require a commitment to withdraw the loan at maturity.