Mortgage Rates are only a small part of the Loan Terms that Matter to Me | HoltonWiseTV Highlights
Channel: HoltonWiseTV
Date: 2023-02-28

With all of the recent mortgage rate volatility, many home buyers and investors are watching the mortgage rate updates like a hawk. Thing is, the mortgage interest rate is only one small piece of the mortgage loan terms that should matter the most to you as a property buyer. There are other parts of the mortgage loan terms and conditions that are even more important than the loan's interest rate. The most important mortgage term is the amortization schedule. The type of property you buy is going to effect the type of amortization schedule you are going to be able to get with your loan. For example, mortgage loan terms for single family houses, duplexes, triplexes and 4 unit apartment buildings are much different than the financing terms you'll see for 10 unit apartment buildings. The reason for this is that single family houses, duplexes, triplexes and4 unit apartment buildings all qualify for residential financing terms. Any building that has more than 4 residential units does not qualify for residential financing. When a building qualifies for residential financing the property buyer can get their loan fully paid off over the course of a 30 year amortization and payment schedule. When a property buyer gets a loan on a property that does not qualify for residential financing, they have to use commercial financing. Commercial loans typically have much more expensive loan terms such as a 30 year amortization schedule with a 5 year balloon payment. This early balloon payment ensures that the buyer pays much more in interest than principal over the course of their loan than they would of if they have a traditional 30 year mortgage with a higher interest rate. Subscribe to HoltonWiseTV to learn more about financing homes and apartment buildings.


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