commercial lender mortgage
two basic types of amortized loans are the fixed rate mortgage (FRM) and adjustable rate mortgage (ARM). In a FRM, the interest rate, and hence monthly payment, remains fixed for the life (or term) commercial lender mortgage the loan. In the U.S., the term is usually for 10, 15, 20, or 30 years. In the UK the fixed term commercial lender mortgage be as short as five years, after which the loan reverts to a variable rate (which makes the loan an ARM). In an ARM, the interest rate is fixed for a period of time, after which it will commercial lender mortgage (annually or monthly) adjust up or down to some market index. Common indices in the U.S. include the Prime Rate, the LIBOR, and the Treasury Index ("T-Bill"). Other indexes like 11th District Cost of Funds Index, COSI, and MTA, are also available but are less popular. Adjustable rates transfer part of the interest rate risk from the lender to the commercial lender mortgage and thus are widely used where unpredictable interest rates make fixed rate loans difficult to obtain. Since the risk is transferred, lenders will usually make the initial interest rate of the ARM's note anywhere from 0.5% to 2% lower than the average 30-year fixed rate. In most scenarios, the savings commercial lender mortgage an ARM outweigh its risks, making them an attractive option for people who are planning to keep a mortgage for ten years or less. A commercial lender mortgage amortization or balloon loan is one where the amount of monthly payments due are calculated (amortized) over a certain term, but the outstanding principal balance is due at some point short of that term. A balloon loan can be either a Fixed or Adjustable in terms of the Interest Rate. Many Second Trust commercial lender mortgage use this feature. The most common way of describing a balloon loan uses the terminology X due in Y, where X is the number of years over which
commercial lender mortgage
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