Important items to review in Loan Documents before signing
Below is a list of common items that you may want to review and double check before signing a commercial real estate mortgage loan document set. However, please note that this list is not exhaustive and that you should always consult with a qualified professional, such as an attorney, before making any final decisions. Here are some of the most important things to review and double check:
Loan Amount and Interest Rate: Make sure that the loan amount and interest rate are what you agreed upon.
Repayment Terms: Review the repayment terms of the loan and make sure that they are acceptable to you. Look for any hidden fees or penalties.
Collateral: Make sure that the collateral you are putting up for the loan is accurately reflected in the documents and that you understand the risks associated with using that collateral.
Insurance Requirements: Check if the lender requires you to obtain insurance coverage, and if so, review the coverage limits and terms.
Prepayment Penalty: Check if there is a prepayment penalty, and if so, review the terms and the costs associated with prepaying the loan.
Default Provisions: Review the provisions that specify what will happen if you default on the loan, including any fees, penalties, and potential consequences for your collateral.
Due Diligence Items: Review any due diligence items that were included as a condition of the loan, such as property inspections, environmental assessments, and appraisals.
Closing Costs: Review the closing costs associated with the loan, including any lender fees, title fees, and third-party fees.
Payment Schedule: Understand the payment schedule, including the timing and amount of each payment, and make sure that you are able to meet those obligations.
Preparing for Future Events: Review any provisions related to future events such as the possibility of refinancing or the sale of the property.
Again, it is important to seek the advice of a qualified professional, such as an attorney, to ensure that you fully understand the terms and conditions of the loan documents and that they meet your needs.
If you have any questions about this article or would like to discuss a scenario of your own with our team, please feel free to contact Colin Dubel at email@example.com or 949-735-6415.