7 Essential Questions to Ask Your Commercial Mortgage Lender

#### Introduction

Securing a loan is a significant financial decision that requires thorough understanding and careful consideration. Asking the right questions can help you get a clearer picture of the loan terms and ensure that you make an informed decision. Here are seven essential questions you should be asking your lender right now.

#### 1. What Are the Total Costs Associated with This Loan?

**Why Ask?**
Understanding the total cost of the loan, including interest rates, fees, and any additional charges, helps you evaluate the affordability and compare different loan offers.

**Follow-Up Questions:**
- Are there any origination fees or closing costs?
- What is the annual percentage rate (APR)?

#### 2. What Is the Interest Rate and Is It Fixed or Variable?

**Why Ask?**
Knowing the interest rate and whether it is fixed or variable helps you understand your monthly payments and the potential for rate changes over time.

**Follow-Up Questions:**
- If the rate is variable, how often does it adjust?
- What is the maximum rate it can reach?

#### 3. Are There Any Prepayment Penalties?

**Why Ask?**
Understanding prepayment penalties can help you avoid additional costs if you decide to pay off your loan early or refinance.

**Follow-Up Questions:**
- How is the prepayment penalty calculated?
- Are there any conditions under which the penalty would be waived?

#### 4. What Are the Repayment Terms?

**Why Ask?**
Knowing the repayment terms, including the length of the loan and the repayment schedule, helps you plan your finances and understand your long-term obligations.

**Follow-Up Questions:**
- Is there a grace period before repayments begin?
- Are there options for early repayment without penalties?

#### 5. What Collateral Is Required?

**Why Ask?**
Understanding the collateral requirements helps you know what assets you need to pledge and the risks involved if you default on the loan.

**Follow-Up Questions:**
- Can personal assets be used as collateral?
- What happens if the value of the collateral changes over time?

#### 6. How Long Does the Approval and Funding Process Take?

**Why Ask?**
Knowing the timeline for loan approval and funding helps you manage your expectations and plan accordingly for your financial needs.

**Follow-Up Questions:**
- What documentation is required for the application?
- Are there any steps I can take to expedite the process?

#### 7. What Support and Services Do You Offer Post-Funding?

**Why Ask?**
Understanding the support and services available after the loan is funded helps you know what to expect in terms of customer service and assistance with managing your loan.

**Follow-Up Questions:**
- Is there an online portal for managing payments and account information?
- What should I do if I encounter financial difficulties and cannot make a payment?

#### Conclusion

Asking these questions can help you gain a comprehensive understanding of the loan terms and make an informed decision. It's essential to feel confident and well-informed before committing to a loan, and a reputable lender will be willing to provide clear and detailed answers to all your questions.

At Atlantic Commercial Lending, a Licensed Commercial Mortgage Brokerage with an NMLS ID #2429887, we prioritize transparency and customer support. Contact us today to discuss your financing needs and get answers to all your loan-related questions.