The Difference Between Residential and Commercial Loans
The majority of my previous two posts have focused on home loans and how the game isn't in our favor while most of the population is tuned out.
Guess what? It's the same in the commercial arena and no one notices it there either.
Here's the main difference between the two loan categories: Commercial loans will be amortized over a certain period, 20 or 25 years, for example. However, they typically require a balloon payment at some fixed point, way before the end of the amortization period. 10 years, for example.
Take that in to consideration for a moment.
In ten years, you either need to come up with all the money owed to the bank or refinance. At 10 years, you will have paid roughly 70% of the total interest owned on a 20 year loan. Time to refinance.
Do you see the scam?Read More