Question

In a typical commercial mortgage:

a) The principal is fully amortized during the loan term
b) The same amount of principal is amortized each month.
c) The amortization schedule is longer than the loan life
d) None of the above

Answer 1

a) The principal is fully amortized during the loan term

Step-by-step explanation:

Commercial mortgage loans are similar to residential residential mortgage loans. They are both used to purchase real estate properties. The difference is that commercial mortgage loans tend to cover roughly 70% of the real estate value while residential loans can cover a higher percentage. Also, commercial mortgage loans can last up to 25 years, while normal residential mortgages usually last 30 years.