Commercial mortgage loan questions (student)

[Nandi]

Good day

My name is Nandi. I am a Masters degree student in Project Management at the University of Pretoria, South Africa. I hope that somebody will be able to assist me with one of our assignments.

We have to do a case study feasibility study for the planning, development and operation of a shopping centre, comparing two locations in Texas (Lot A in Austin (land cost = $536 200) and Lot B in Fredericksburg (land cost = $601 120)).

Regarding the purchasing of the land, the assignment states that the "Closing costs" are as follows:
·Attorney's consulting fee: $750
·Title insurance and closing costs: $ 2091
Are there any other standard costs/administrative costs involved in the purchasing of land for commercial purposes?

In the case study it is further stated that the Subchapter C Corporation doing the development will obtain a construction loan for the design/engineering and construction period (60% mortgage loan @ 8.5% p.a. compound interest. Once operation start the loan a 70% 30 year mortgage loan (reducing balance loan type) has been negotiated @ 7.5% compounded p.a. Are there any other fees involved in obtaining mortgage loans other than the loan origination fees?

I'm not very clear on the construction loan concept. It appears to me that the Corporation only pays the interest component on the actual amount of the loan that they have use - is this correct? Is there a stipulated time period for a commercial construction bond, or is it mutually agreed between the two parties? I assume the whole construction loan amount plus any outstanding interest then gets paid back when the Corporation obtain the permanent mortgage loan? If there is a period stipulated for the construction loan, is any penalties payable if construction finish sooner and the loan is paid of sooner?

Can you tell me if the interest payments on construction loans and permanent mortgage bonds are deductible from tax?

The assignment states that interest on the permanent mortgage loan is compounded annually, which seems very strange to me - is that done in the USA?

Are there any differences between commercial mortgage bonds and residential mortgage bonds that we should be aware of?

Thank you so much for your assistance!

Nandi

[Admin]

The agency that owns and operates these forums strictly write surety bonds. It sounds like you need to post this in a mortgage broker industry forum. The forum you posted in is for discussing the bonds that guarantee mortgage broker licenses, not loans.

Sorry, but I think you are going to need to do a google search for a mortgage broker forum.