Mortgages are always a touchy subject in the real estate market. This is because mortgages can be used for either speculation or growth. A mortgage is a contract stating that the lender has an interest in the property being mortgaged. In exchange for this interest, the lender gives the borrower a set sum of money. The borrower can do with this money what they like. Usually a mortgage is taken out to finance business interests or other financial obligations. Like all loans, however, a mortgage has a term of repayment and an interest rate. The interest rate determines how fast the amount owed exceeds the original borrowed amount. For example, an interest rate of %5 annually means that the mortgage amount that is owed grows by five percent per year. So if the amount owed was $1000, at the end of a year the amount owed would be $1050.

There are many types of mortgages with many different interest rates, but generally speaking they fall into two kinds: residential mortgages and commercial mortgages. Residential mortgages are mortgages that are taken out on homes and other residential properties. Commercial mortgages are mortgages that are taken out on businesses and other commercial properties. Commercial mortgages often have different interest rates than residential mortgages, but this depends on a number of different factors, including the rate of inflation/deflation, whether the economy is in a boom period or a bust period, etc.

A commercial mortgage loan can be taken out on property technically classified as residential if the property is used for commercial purposes; for example, a commercial mortgage is taken out on an apartment building by the landlord who collects rent from his tenants. The primary purpose of a commercial mortgage is to raise capital to finance business expenses such as expansion, inventory or upkeep. Commercial mortgage rates depend on the financial status of the borrower. The single most important statistic that lenders use to evaluate the financial condition of the borrower is the borrower’s credit rating. Having a good credit rating insures that the borrower gets a favorable rate.