Commercial Real Estate Loan Programs
Commercial Real Estate Loan Highlights
Commercial real estate loans are typically used to finance the purchase or development of commercial properties such as office buildings, shopping centers, hotels, and industrial properties. Some of the highlights of commercial real estate loans include:
- Large loan amounts: Commercial real estate loans typically involve large loan amounts, as commercial properties tend to be expensive.
- Longer loan terms: Commercial real estate loans often have longer loan terms than other types of loans, ranging from 5 to 30 years.
- Lower interest rates: Commercial real estate loans usually have lower interest rates than other types of loans because they are secured by the property itself.
- Amortization: Commercial real estate loans are usually amortized over the loan term, which means that the borrower makes regular payments that include both principal and interest.
- Balloon payments: Some commercial real estate loans require a balloon payment at the end of the loan term, which is a large lump sum payment that is due at the end of the loan term.
- Collateral: Commercial real estate loans are secured by the property being financed, which means that the lender can seize the property if the borrower defaults on the loan.
- Recourse vs non-recourse: Commercial real estate loans can be either recourse or non-recourse. Recourse loans allow the lender to pursue the borrower's personal assets in addition to the property if the borrower defaults on the loan, while non-recourse loans only allow the lender to seize the property itself.
- Prepayment penalties: Some commercial real estate loans have prepayment penalties, which are fees that the borrower must pay if they pay off the loan early.
Overall, commercial real estate loans offer a way for businesses and investors to finance the purchase or development of commercial properties, and can offer attractive interest rates and longer loan terms than other types of loans.
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