Adjustable commercial mortgage funding is a real estate loan with an interest rate that changes periodically, according to an index that is selected when the mortgage is issued. With an ARM (Adjustable Rate Mortgage), you might qualify for a larger loan and your ARM could be less expensive than a fixed rate loan over a long period.
The benefits of an adjustable commercial mortgage are that you have time periods with fixed interest rates along with opportunities to benefit from lower interest rates if the rates go down. One downside to this is that if your rate is adjusting during periods of higher interest then this could result in higher payments. If you are confident that your income will steadily increase then an adjustable commercial mortgage loan, or ARM, might be beneficial for your business.
There are a variety of programs to choose from:
- Easy in/easy out
- Variable/convertible loan
- Adjustable rate with a future option to increase loan
- Simple interest loans with or without graduated payments
To compare one ARM with another or with a fixed rate mortgage, you need to know about indexes, margins, discounts, cap structures, negative amortization and convertibility. Provide us with some information and we will match you to sources who can help.