Types of Commercial Mortgage

A commercial mortgage is any loan that is secured mainly by a commercial property. It can be a rental property, such as apartment buildings, shopping centers and office buildings or by a company related to property (including the owners of buildings and manufacturing facilities).
There are a number of different types of commercial mortgages:
Permanent loan: The most basic of all mortgage business is the permanent loan, primarily long-term first mortgage. 5 to 10 years is the standard range of commercial loans before they fall due, but are generally amortized over 25 to 30 years normally.
To keep the loan: A permanent loan that is used to pay for a construction loan.
Construction loan: When a developer is constructing a building, the first type of loan that you tend to look for is a construction loan, which will cover development costs until the property is ready the user (at that time construction loan is typically paid to take a loan).
Overdraft loans are most popular today, under which the lender does not require a commitment to move forward. In the past, lenders require bringing the commitments, agreements between the developer and the lender that the borrower will pay the construction loan, as long as the construction proceeded according to plan.)
Carry forward the commitments can help a developer easier to sleep at night, but usually cost 1-2 points, plus an extra point (at least) if the loan funds carry. There are both commercial Mone available now discovered that a construction loan is usually sufficient.
Bridge loan: A short-term commercial mortgage is any loan between 6 months to 5 years, the most common is about three years.
Mezzanine Loan: A loan mezzanine is the alternative to a commercial second mortgage (some commercial real estate lenders offer mortgages second). In contrast with a second mortgage, a mezzanine loan is secured by shares of the company that owns the property instead of by the property itself.
Who sells commercial mortgages?
Commercial mortgages are typically offered by banks (both small and large), CMBS commercial mortgage lenders, life insurance companies, lenders and hard money.
A CMBS lender makes a loan agreement with very specific guidelines that then meet with other loans and in a big pool and issue securities to investors. CMBS lenders typically offer attractive interest rates, but also tend to add to the blockade of the clauses and big pre-payment penalties.
Life insurance companies generally only look at the most desirable properties in a given region, and often lend no more than 60-70% loan to value.
The flexibility and speed of the hard money lending is the only advantage over the loans granted by banks, CMBS lenders or life insurance companies, but this can be a great advantage sometimes. The developers seeking fast cash or loans on properties in distress - the developers or rejected by other lenders - you can usually find a loan with hard money lenders.