Real Estate Loans

Exploring Real Estate Loans

Real estate loans are a type of loan that is awarded to applicants who intend to buy a piece of real estate. Real estate generally refers to land whatever may be on the land at the time, whether that be natural resources or permanent buildings. Therefore, these are loans given to acquire this type of property. This type of loan is generally secured with a mortgage. Therefore, if the debtor misses a certain number of payments, the institution that awarded the loan may transfer the title of the property into their name.

What types of real estate loans exist?

The most important step in obtaining any kind of loan is doing research. You need to explore what kind of loans are available and the rates and conditions and make sure you will be able to live up to them. When speaking of real estate loans, there are two broad topics: commercial real estate loans and residential real estate loans. Commercial real estate loans may refer to a hard money loan, while a residential real estate loan may also be called a home loan or mortgage loan.

Commercial real estate loans, or are those loans that are based on the value of a piece of commercial real estate. There are two basic types of commercial real estate loans: conventional commercial real estate loans and hard money loans. Often conventional commercial real estate loans may be considered small business loans because the property acquired is intended to expand, or further a business. Hard money loans are slightly different. While hard money loans are also based on the value of the commercial property in question, they generally have much higher interest rates and are rarely offered by commercial banks or commercial institutions.

A mortgage or home loan most often refers to a loan that enables an individual to finance the purchase of residential real estate. Now this may be commercial property, but more typically it is in order to obtain a title to a piece of residential real estate. When securing this type of loan, the borrower often agree to pay a monthly installment on the loan that includes an amount of the debt and an interest rate on the amount loaned to the mortgager. Mortgages or home loans are set to be paid off over a certain amount of time, when the loan has been repaid in full, the mortgager becomes the full owner of the property in question.