ProfDale Property Video 45 - Mortgages

[@dawokboisgabaguys2324]

ProfDale is my hero!

[@mubasharothi6162]

Great Professor, well-explained property concepts.

[@ColBloodNDN]

Great video! So far, I am halfway through it and still got the other half to go. I've been taking notes. Question - for commercial properties what is the reason behind balloon payments, if ostensibly 30 year mortgages are given when balloon payments are expected after 10 years?

[@profdalespropertyvideos185]

The lender probably prefers a 10-year term because the lender doesn't have confidence that the value of the real estate as collateral will hold up over a longer period. Loans on commercial property are rarely made for more than a 10 to 15 year term. However the loan may have its monthly payment set at a level that would amortize it over a longer period, such as 20 or even 30 years, in order to keep the monthly debt service down to a more moderate level that the borrower can afford to pay. The obvious result is that a balloon payment will be due when the loan matures after, say, 10 years.

[@joannthomases9304]

Who are emmy 1 from emmy 2 ?

[@profdalespropertyvideos185]

ME1 is the first mortgagee or first lender. ME2 is the 2nd mortgagee or lender. (ME is an abbreviation for mortgagee - that is, a party that makes a loan and takes a mortgage.)