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Commercial Interest Only Mortgage

A Commercial Mortgage or Commercial Property Loan is called “Interest Only” when its monthly payment does not include the repayment of principal for a certain period of time. Interest Only Commercial Loans are offered on fixed rate or adjustable rate mortgages as wells as on option ARMs.  At the end of the interest only period, the loan becomes fully amortized, thus resulting in greatly increased monthly payments.  The new payment will be larger than it would have been if it had been fully amortizing from the beginning.  The longer the interest only period, the larger the new payment will be when the interest only period ends.

You won’t reduce the principal balance during the interest-only term.  However, it could help you close on the commercial property you desire, instead of only settling for a lower-end property.

Since you’ll be qualified based on the interest-only payment, and may possibly refinance before the interest-only term expires anyway, it could be a way to effectively lease your commercial property now and invest the principal portion of your payment elsewhere.

For example, if you borrow $1,000,000 at five percent (5.00%), using a 30-year amortization, your monthly payment would be $5,368.  On the other hand, if you borrow $1,000,000 at five percent (5.00%) with a 5-year interest only payment plan, your initial monthly payments would only be $4,167.  This saves you $1,201 per month or $14,412 per year in payments.  However, when you reach year six, your monthly payments will jump once the loan is re-amortized.  Hopefully, the property income will have risen accordingly to support the higher payments or hopefully you have refinanced your commercial property loan by that time.

Mortgages with interest only payment options may save you money in the short-run, but they may actually cost more over the 30-year term of the loan.  However, most borrowers repay their mortgages well before the end of the full 30-year loan term.

Commercial Properties and Commercial Property Borrowers with sporadic incomes may benefit from interest-only commercial loans.  This is particularly the case if the mortgage is one that permits the borrower to pay more than interest-only.  In this case, the borrower may pay interest-only during lean times and use bonuses or income spurts to pay down the principal during better times.



Testimonials

Eric D.
Pleasure to work with and extremely knowledgeable

Ronny was a pleasure to work with and is extremely knowledgeable. His hard work was never ending until the job was done. They handled a complex lease and guided us through entire process, including the paperwork. Not to mention a below market lease rate and more than all the features we needed in a site. We later used Assets America for a unique equipment financing deal where once again Ronny and team exceeded our expectations and our timeline. Thank you to Assets America for your highly professional service!

exp MFGroup
Great experience with Assets America

Great experience with Assets America. Fast turn around. Had a lender in place in 30 minutes looking to do the deal. Totally amazing. Highly recommend them to anyone looking for financing. Ronny is fantastic. Give them a call if the deal makes sense they can get it funded. Referring all our clients.

William P.
Assets America guided us every step of the way

Assets America guided us every step of the way in finding and leasing our large industrial building with attached offices. They handled all of the complex lease negotiations and contractual paperwork. Ultimately, we received exactly the space we needed along with a lower than market per square foot pricing, lease length and end of term options we requested. In addition to the real estate lease, Assets America utilized their decades-long financial expertise to negotiate fantastic rates and terms on our large and very unique multimillion dollar equipment purchase/lease. We were thankful for how promptly and consistently they kept us informed and up to date on each step of our journey. They were always available to answer each and every one of our questions. Overall, they provided my team with a fantastic and highly professional service!

Bob B.
The company is very capable, I would recommend Assets America

Assets America was responsible for arranging financing for two of my multi million dollar commercial projects. At the time of financing, it was extremely difficult to obtain bank financing for commercial real estate. Not only was Assets America successful, they were able to obtain an interest rate lower than going rates. The company is very capable, I would recommend Assets America to any company requiring commercial financing.

Ricardo L.
Assets America was incredibly helpful and professional

Assets America was incredibly helpful and professional in assisting us in purchasing our property. It was great to have such knowledgeable and super-experienced, licensed pros in our corner, pros upon which we could fully rely. They helped and successfully guided us to beat out 9 other competing offers! They were excellent at communicating with us at all times and they were extremely responsive. Having them on our team meant that we could always receive truthful, timely and accurate answers to our questions. We would most definitely utilize their services again and again for all of our real estate needs.

HMG R&D
Assets America is a great company to work with

Assets America is a great company to work with. No hassles. Recommend them to everyone. Professional, fast response time and definitely gets the job done.

DAC Team
Great experience

Ronny at Assets America has been invaluable to us and definitely is tops in his field. Great experience. Would refer them to all our business associates.

MF Group
We were very pleased with Assets America’s expertise

We were very pleased with Assets America’s expertise and prompt response to our inquiry. They were very straight forward with us and helped a great deal. We referred them to all our business associates.

Manny C.
Worked with this company for decades

I’ve worked with this company for decades. They are reputable, knowledgeable, and ethical with proven results. I highly recommend them to anyone needing commercial financing.

David B.
Top-notch professional

Ronny was incredibly adept and responsive – top-notch professional who arranged impressive term sheets.

Monte M.
Assets America helped us survive a very difficult time

Assets America helped us survive a very difficult time and we most definitely give them 5 stars!

Brent G.
Gave me direction to go

Ronny was very friendly and though we were unable to make something happen at the moment he gave me some direction to go.

Allan E.
Highly recommend them for any type of commercial financing

My business partner and I were looking to purchase a retail shopping center in southern California.  We sought out the services of Ronny, CFO of Assets America.  Ronny found us several commercial properties which met our desired needs.  We chose the property we liked best, and Ronny went to work. He negotiated very aggressively on our behalf. We came to terms with the Seller, entered into a purchase agreement and opened escrow.  Additionally, we needed 80 percent financing on our multimillion-dollar purchase.  Assets America also handled the commercial loan for us.  They were our One-Stop-Shop. They obtained fantastic, low, fixed rate insurance money for us.  So, Assets America handled both the sale and the loan for us and successfully closed our escrow within the time frame stated in the purchase agreement.  Ronny did and performed exactly as he said he would. Ronny and his company are true professionals.  In this day and age, it’s especially rare and wonderful to work with a person who actually does what he says he will do.  We recommend them to anyone needing any type of commercial real estate transaction and we further highly recommend them for any type of commercial financing.  They were diligent and forthright on both accounts and brought our deal to a successful closing.