What does "due in" mean?

In Buying Property - Asked by Frank W. - Dec 20, 2008
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Answer(s)

Bryan J. C.
Broker/Agent
Wauwatosa, WI

It means that the balance of the loan will have to be paid back after that many years. After that time the Bank will most likely renegotiate the terms of the loan.

Dec 22, 2008
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Frank W.
Owner/Investor
Oaklawn, AR

Do i have to take over the previous owner's loan?
If they are sell me the property won't they just pay back the bank the remaining principal they have left on the loan, and then I take out my own loan with a 15 year term? There loan says Due In: 3.
They list the ad on Loopnet as "proposed" instead of "actual." Is the difference b/t these two options just that proposed means I have the choice of taking over their loan, whereas "actual" means I have to take over their previous loan?
Not really sure how this works.
Thanks for helping a rookie.

Dec 22, 2008
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Chris S.
Broker/Agent
Coeur D'alene, ID

Yes/no. It's possible that you can "assume" the existing financing but most times the loan would be paid off through escrow and then you obtain financing of your own. On commercial proeprty most loans are quoted as "20 years due in 5" meaning that the loan is amortized over 20 years but comes due in year 5 (balloon payment). Of course, there are types of varieties of terms. There also are fully amortized commercial loans out there, but they are few and far between.

Jan 5, 2009
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Chris S.
Broker/Agent
Coeur D'alene, ID

Typically you are correct. The seller's financing will be paid off through escrow and you will obtain a new loan. You will find most commercial loans are quoted as "xx number of years due in xx". Meaning the loan is amortized over a longer period, but the note comes due in xx number of years.

Jan 5, 2009
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