Mortgage Amortization provides you with the needed information so you can calculate the value/cost of a loan. Mortgage Amortization and the annual cost of debt service does not affect the value of Commercial Real Estate and Investment Properties. For an investor looking at an Income Statement, Mortgage Interest/Debt Service is deducted after Net Income leaving you with the Net Operating Cash Flow. The value of Commercial Real Estate Investment is measured on the Net Operating Income of the property (Gross Income-Vacancy & Credit loss=Effective Income-Operating Expenses=Net Operating Income-NOI).
Mortgage Amortization-Benefits
With this mortgage amortization calculator, you can easily compare various borrowing scenarios including;
- Interest Rate
- Loan Term
- Compounding Frequency
- Additional Payments
Commercial Real Estate Loans
There are many types of commercial real estate loans, but the three most prevalent are Conventional and SBA 7a and 504 Loans. With an SBA Loan, the property must be at least 51% owner-occupied.
Basic Provision of a Conventional Loan;
- Downpayment typically 20%
- Shorter Term Loan typically with a balloon payment in 10 years of lease
- Amortization 20-30 years.
- Quicker Close-It usually takes 45 days for loan approval and closing
- Fees are paid upfront and not financed
Basic Provision of an SBA 7a Loan;
- Downpayment 10%
- 25-year Amortization
- Financing additional cost into the loan (Tenant Improvements/Moving Costs, etc.)
- Limited Prepaypayment Penalties- 3 years(5%, 3%,1%)
- Fast Approval-Typically close in 45 days
- Can apply additional collateral if necessary
Basic Provision of an SBA 504 Loan;
- Downpayment 10%
- Fees can be financed
- Longer Fixed rate options (25/25)
- Prepayment Penalties Apply 10-year (10%, 9%, 8%….etc)
- Closing typically in 60 days
For more information on SBA Loans visit SBA website sba.gov. The SBA uses a Personal Financial Statement to analyze the repayment ability and creditworthiness of an application for an SBA-guaranteed 7(a) or 504 loan or a guaranteed surety. To download the SBA Financial Statement <<Click Here>>
This Mortgage Amortization Calculator also provides a mortgage amortization table, which shows the allocation of the payment between its two components, principal and interest making it easier for you to differentiate between principal payment and interest paid.
