Any time you are exploring your options for commercial real estate loan programs through Commercial Lending Corporation, you need to be aware of some of the terminology used. Having this knowledge helps you avoid getting into situations, later on down the road, where you are not aware of specific terms or features in a loan contract you signed. In addition, your underwriter should cover the specific features and details contained in your loan. Further, it is your responsibility to read the contracts, ask questions, and make sure you completely understand the terms and conditions of your approved loan.
Two terms frequently used are fixed rate and adjustable rate. These terms refer to the interest rate you obtained with your commercial loan. Fixed rate program means your interest rate remains the same throughout the life of the loan. On the other hand, adjustable rate means your initial interest rate may be fixed for a short period of time, and then adjust after that period. Additionally, this implies your actual interest rate could increase, based upon the current market rates.
Two other terms you hear being used with commercial programs from Commercial Lending Corporation are recourse and non-recourse. There terms are related to the amount of damages a lender is able to seek in the event you default on your obligation. Your commercial loan will be one, or the other. Recourse loans give lenders the most freedom to take legal action, in the event of a default. Not only are they able to seize any collateral, but also to pursue collecting other assets until the debt is fully satisfied. Non-recourse loans limit the legal actions a lender is able to take, to only the collateral used to secure the loan.
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