by Tom G. Honeycutt
The real estate sector is one of the most growing industries in the word. The industry exists in two categories: the residential and commercial. Residential manages duplexes, small family homes, and small apartments. On the other hand, commercial one entails handling office buildings, warehouses, and other buildings used by businesses as trading place. The purpose of buying several properties and leasing out to tenants is collect rents; hence functions as a source of income. The value of the property is based on amount of income it produces. Business entities seek Atlanta commercial real estate finance to buy properties and generate income from them.
The increased demand of financial assistance from investors in the real estate industry has led to the increase number of banks, private investors, and private investors willing to offer the services. Established investors acquire funds from insurance companies and pension funds. Commercial loans are similar to the residential ones. The borrower is supposed to prove beyond any reasonable doubt that she or he has financial ability to repay the loan. In case of business entities, they must secure the loan with collateral.
Established investors who have clean financial record and exemplary credit worthiness are likely to acquire bigger loans than their counterparts whose credibility is in question. In fact, the finances are offered via the conventional plan. Others who cannot prove their credibility are forced to seek government-backed financial help. Financial institutions have diverse options; hence, investors should weigh the options and settle on affordable one.
Commercial loans have unique terms compared to their residential counterparts. Their term may range from a five years to twenty years. Additionally, the amortization period happens to be longer than loan terms. The loan term length and amortization duration interferes with the lender charges. However, the terms of the deals is can be negotiated.
The interest rates associated with these loans are significantly higher. The overall loan cost includes fees like loan applications, appraisal, loan origination, and survey fees. In addition, some fees must be settled up prior to loan approval. Other charges are added to the debt annually.
To eliminate instances of investors paying the loan before the recommended time, restrictions are put in place. The restrictions preserve the interest of the lender. In case an early repayment is opted for, repayment penalties will apply.
The intention of business entities that buys properties is to accumulate income from leasing out the property. The financial transaction closed by the entity for five years must be presented to the lender during the application process. The entity must prove its willingness to abide by the terms and conditions by completing the paperwork.
About the author:
Tom G. Honeycutt is a full-time real estate entrepreneur in Atlanta, GA. Tom helps readers by providing practical and useful knowledge to better understand lending choices. If you are looking for Best Atlanta Commercial Building Financing he recommends you check out www.ifundinternational.com.