| Interest is paid a fee in borrowed capital. Assets rendered includes money, parts, consumer goods through the purchase in installments, major assets such as aircraft, and even entire factories in finance lease arrangements. The interest is calculated on the value of assets in a similar way as about money. The interest can think of as rent money .
The fee is pay the lender precedent for other investments that could have been useful to do with borrowed money. Instead of using the assets directly lender, is moving to the borrower. The borrower then has the advantage of using the assets ahead of effort required to obtain them, while the lender has the advantage of the fee paid by the borrower privilege. The amount borrowed or the value of the assets rendered, is called the principal. This value is carried out by the borrower credit. The interest is therefore the price of credit, not because the price of money - and mistakenly - to be commonly se cree. The percentage of principal that is paid as a fee (interest) on certain period of time, called the interest rate. A commercial mortgage is similar to a residential mortgage, except the guarantee is a commercial building or other real estate of businesses, nonresidential property. Moreover, of the commercial mortgages are typically taken above by companies instead of various borrowers. The borrower can be an association, incorporated businesses, or a limited liability company, thus the evaluation of the solvency of the businesses can be more complicated than is the case with residential mortgages. Some commercial mortgages are nonrecourse, C-with-D., that in case of the defect in refunding, the creditor can only seize the guarantee, but does not have any other complaint against the borrower for any remaining insufficiency. The general reason of this is double: many laws significantly prevent the creditor from going after the borrower for any insufficiency, and of the mortgages structured on sale while the obligations give a higher priority to constantly receive a certain kind of income and thus require a clause which makes it possible to the lender to immediately take the property, independently of the steps of bankruptcy by which the borrower could pass. Frequently, the mortgage is supplemented by a general engagement of the borrower or a personal guarantee of the owner(s), which makes the debt payable inside completely even if the preclusion on the hypothèquée guarantee does not satisfy exceptional balance. |
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