Getting a Longer Fixed-Rate Period

Published January 5, 2013 

Call 866-811-9515 today to see if you pre-qualify for commercial loans – especially an apartment loan.

Did you know that back in the Depression, Roosevelt made it possible for increased numbers of people to own homes? At the time, as you can imagine, there were a tremendous number of foreclosures, and not many people could afford to own their own homes.

The Home Owners Mortgage Act was passed, and it makes it more affordable to own a home. The loans were fixed for a much longer period of time than before – 20 to 25 years and, later, 30 years. The 30-year period was picked because a working career was considered to be 30 years followed by retirement. It was thought that during the 30 years, they could pay off their home loans and then enjoy their retirement.

Commercial loans are done much differently than residential loans. If you go with a community bank, you will get a shorter fixed rate than if you go with a company such as ours. Community banks generally will give you a 3-year or 5- year fixed-rate period. This is because they have to borrow money wholesale and turn around and sell it to you retail. If the bank gives you a fixed commercial loan for too long a period of time, and rates go the wrong way for them, it can lose money on your loan.

Apartment Loan Store has loan sources such as Fannie Mae and Freddie Mac that usually can give you fixed rates of 5, 7, 10, 15, or 20 years or more. Getting a loan with a long fixed rate means that you will likely save many thousands of dollars.

Call 866-811-9515 now to see if you qualify for a commercial loan, or for any questions and concerns you may have related to commercial-apartment loans.

By Bruce Painter, Marketing Director