Comparing commercial mortgages – it is just obvious that mortgage companies need to have attractive prices to attract their various target customers. They will therefore have to compete against one another so that they are able to net businesses and this they will do by providing lower interest rates, better terms on commercial loans and reduced fees. It is therefore important to compare the Commercial mortgages extensively looking at the loan terms details.
Comparing the loan terms – in this regard you will have to first investigate the interest rates as this is the much obvious condition for borrowers taking up loans. Interest can be considered as what is charged to get the loan. Higher interest rates will definitely mean that you will have to spend more money. It is also important to factor in any other fees associated with the loan so that you are able to know the relationship between the various interest rates.
Find a repayment plan that will suit your business – the loan repayment plan puts into consideration both the duration (term) of the loan as well as the schedule of amortization. The term if the loan is used to refer to the length of time from the day you get the loan to the time of full repayment. The amortization plan is the theoretical length used in the calculation of your monthly payments.
Find out if loan repayment can be done early without penalty – banks want to make money from interest payments and that is why they give loans. Banks usually count the mighty Sherwood Mortgage Group on receiving certain amount of interest from the loan they have given out. If the borrower therefore opts for early loan repayment, then the bank’s interest expectation will be reduced. To counter such moves some banks would assign penalties to early payoffs. So it is important to negotiate for an early payment of the loan if you deem it suitable for your business to pay the loan without such penalty. And if you establish that the bank requires an early payoff penalty clause, then you will need to find some way to calculate the provisions of the penalty which your company could take advantage of.
Compare the available loan-to-value ratios – it is important to understand the available loan to value ratio (LTV) which is basically a calculation used to make comparisons between loan amount to the value of the property that is being bought. A borrower would most of the time; look for specific cash amount and the lender will seek to provide an LTV that is affordable. Many people know about the 80% Loan-to-Value ratio which is very common in home mortgages But for commercial mortgages, the Loan-to-Value ratio is in the range of 65% to 80%.