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Nadlan Capital Group – Financing For Foreign Investors in the US Market
Loan-to-Value Ratio (LTV)
LTV is the ratio of a loan to the value of an asset purchased. It's often used to assess the risk of the loan. LTV compares the loan amount to the expected market value of the completed project
Loan-to-Cost Ratio (LTC)
LTC compares the financing amount of a commercial real estate project to its cost. LTC is calculated as the loan amount divided by the construction cost.
Amortization
The process of paying off a loan through regular payments that include both principal and interest.
Principal
The initial amount of money borrowed in a loan, excluding interest.
Interest Rate
The cost of borrowing money, typically expressed as a percentage.
Term
The period over which the loan is scheduled to be repaid.
Collateral
An asset that is pledged as security for the loan. In case of default, the lender can seize the collateral to recover losses.
Credit Score
A numerical representation of a borrower's creditworthiness, often used by lenders to assess the risk of lending.
Default
Failure to fulfill the terms and conditions of a loan, often resulting in legal consequences.
Refinancing
The process of replacing an existing loan with a new one, typically to obtain better terms.
Pre Payment Penalty
- A mortgage prepayment penalty is a fee that some lenders charge when you pay all or part of your mortgage loan off early.
- The penalty fee is an incentive for borrowers to pay back their principal slowly over a longer term, allowing mortgage lenders to collect interest.
- The default Pre Payment Penalty in most 30 Years Loans, is a 5 Years 5-4-3-2-1 structure.
- A 5-4-3-2-1 prepayment penalty, otherwise known as a 5-year step-down prepayment penalty, charges a 5% fee on the outstanding principal loan balance if the loan is paid off in year 1, a 4% fee in year 2, a 3% fee in year 3, a 2% fee in year 4, and a 1% fee in year 5.
- Some states have restrictions on implementing PPP in loans.
