Commercial Mortgage – Flexible Finance Solution For Business Intended Properties
Posted by: admin in Finance, tags: Balloon Payment, Bank Of England, Business Purposes, Credit Score, Fixed Rate Mortgage, Interest Rate Options, Rate Of Interest, Value Ratio, Variable Rates, Warehouses
Commercial mortgage is the loan purchased by a borrower to finance a property for business purposes. The lender has a legal claim over the financed property until and unless the borrower repays the loan in full. With the help of commercial mortgage, one can purchase:
• Shops and offices
• Factories and warehouses
• A piece of land
• A brand new building
Commercial loan can also be used to buy an already existing business. For example, a running hotel or a retail store can be purchased using commercial mortgage. Here are some other aspects of commercial mortgage that are useful to know.
Eligibility Criterion’s
A Commercial Finance expects the borrower to fulfill certain eligibility criterion’s for the loan. For example, a good credit score is one of the most important requirements for the approval of commercial mortgage. Loan-to-value ratio is another thing considered by the lender. It is the expectation of the lender from the borrower to make some contribution in the purchase. Stability and profitability of the borrower’s business is another factor that can affect the lender’s decision to approve commercial finance.
Interest Rate Options
The commercial loans are available with two interest rate options. First is the commercial Fixed Rate Mortgage in which the rate of interest remains unchanged for a fixed term of the mortgage period. The standard variable rates are paid by the borrower once the fixed rate term ends. The second option is the commercial variable rate mortgage, in which the rate of interest changes according to the base rate decided by the Bank of England.
Commercial Mortgage Repayment
One way of repaying the Commercial Mortgage is through a set number of equal payments. Each payment consists of one part as the interest and remainder as the principal. A variation to this is the equal payments with final balloon payment. In this, a set number of small monthly payments are made with a final balloon payment at the end. Interest only payments require the borrower to pay only the interest through monthly payments while the principle is paid as a balloon payment at the end.
Benefits of Commercial Mortgage
The borrower retains the complete ownership of the property. The interest payments on commercial finance are tax-deductibles. Moreover, the borrower has the feeling of owning a commercial property while the monthly payments remain less than or equal to the amount he would otherwise pay as rent.
This is a boon to the small and big business owners of Mortgage. Make sure to deal with a reputed commercial lender.
By: Suzanne Wiiliams
Mortgage Rate Calculators
Posted by: admin in Real Estate, tags: Amortization, Handheld Calculator, Mortgage Brokers, Mortgage Calculator, Mortgage Rate Calculator, Mortgage Rate Calculators, Online Calculators, Online Mortgage, Principal Payment, Rate Of Interest
A mortgage rate calculator is a special calculator that displays the mortgage rate of interest. Online mortgage rate calculators can also display amortization charts with payments to be done on a monthly basis. The basic intention behind using mortgage rate calculators is to show how much of the monthly payment goes towards the principal and how much goes towards payment of interest and taxes.
The inputs required in a mortgage rate calculator are the principal amount of mortgage taken, the period, and the rate of interest during the time of taking the mortgage. If there are any taxes and insurance involved, then they have to be fed into the calculator also. When the solve button is pressed, the figure of the total monthly payment is displayed. Interest rate calculators have a special button that splits this monthly payment into the principal and the interest.
Mortgage rate calculators available online are much more detailed. When the information is inputted, they display an entire chart, which gives the schedule of the amortization. There are various columns such as payment on principal, payment on interest, etc. Such an amortization chart gives a proper view on the fact that as the period increases, the payment towards the principal increases and the payment towards the interest amount decreases. Online mortgage rate calculators can be used to depict up to three different scenarios which gives the buyer a clear idea when purchasing a mortgage. Some online mortgage rate calculators can present the information in a graphical chart format to enable better understanding.
Handheld mortgage rate calculators are used by banks and other companies dealing with the selling of mortgages. They are also frequently seen among mortgage brokers and agents. A handheld mortgage calculator would cost anything between $20 to $100, depending on its quality and the features it has.
By: Elizabeth Morgan
