There are a number of disadvantages to taking out commercial
mortgages:
Collateral. The nature of a mortgage requires
you to pledge the purchased property to the lender. If you
default on the mortgage, the lender is able to foreclose
upon the property and sell it to repay the money owed to
the lender. Make sure that when the mortgage is repaid,
the lender is obligated to release its mortgage and is required
to make any government filings acknowledging this release.
Defaults. The lender may define a variety of events
that will constitute a default on the mortgage, including
failure to make any payment on time, bankruptcy, insolvency
and breaches of any obligations in the mortgage documents.
Try to negotiate advance written notice of any alleged default,
with a reasonable amount of time to cure the default.
