“In a commercial loan, 5 units and above, there’s often a fixed time period and a variable time period. It’s like a variable rate loan in the residential world, but there are no 30 year fixed loans in the multi family world.” -Christina Suter
Today I am talking about the difference between commercial and residential loans and what the process over time looks like for both. A residential loan can maintain the same interest rate and payment through its 30 year entirety. A commercial loan on the other hand will have a fixed period and a variable time period. For a commercial fixed loan it can only be fixed for 3, 5, 7 or 10 years. As the intra bank lending rates increase, so does the interest rates for commercial loans. That is the major difference between residential mortgage loans and commercial mortgage loans.
Topics Covered in this episode:
- What is the difference between a residential loan and a commercial loan
- What is economic forced growth
- What is a variable loan
- How are interest rates based on an industry
- Commercial loans have a ceiling and a floor
- What you need to know about your loan agreement
- What are stair step increases
- What is intra bank lending rate
The Real Estate Breakthrough Show with Christina Suter is where we talk about the reality of real estate, the mindset you need and the tips and tricks to get you moving forward in investing. Join us every week and learn everything you need to know to invest in real estate education and create real wealth for a lifetime.
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