Calculating a real commercial loan

[Brandon G.]

Hello,

I am trying to calculate a commercial loan and have some questions.  I have tried to use several online calculators and they all have varying degrees of criteria.  Some require a balloon payment in years and others don't mention it.  Do all commercial loans require this balloon payment?  If so, do you refinance before or after you reach that point?

I am trying to find the real numbers I would be paying monthly but I'm finding that so many different things I read do not all align I'm not sure how to make sure I'm getting real numbers.   For example, if I am going to take out a $550,000 loan, with $100,000 down and the loan is for 20 years and the interest rate is 5%, how would I calculate this to get my real world payments so I can make sure I'm running my numbers correctly.

Thank you,

Brandon

[Lee Ripma]

@Brandon G.

Balloons are typical, usually 5 years but you can also get 7, or 10. Really depends on what you are buying, your bank, the amount, you. I use Commerical loans in Kansas City under 1M from local banks, here is what I am getting now: 20 year am, 5 years fixed, 4.5% interest. The bank will let you refi with them when the ballon comes due, if you have been paying and bank is still lending. You’ll be subject to interest rate at that time. You can also refi 6 months before the ballon comes due with another bank. Keep in mind most Commerical loans have prepayment penalties.