Final answer:
Ted will likely need to obtain a commercial mortgage to finance the six-unit apartment building he plans to purchase in downtown Newburgh, which is tailored for commercial properties investments.
Step-by-step explanation:
Ted is seeking to finance a property by purchasing a six-unit apartment building in downtown Newburgh. For this type of investment, Ted will most likely need to obtain a commercial mortgage. A commercial mortgage is designed for the purchase, development, or refinancing of commercial property. Unlike a residential mortgage, which is for individual homebuyers, a commercial mortgage is typically used by businesses or investors who aim to generate income from the property through rental or business operations.
Terms and interest rates for commercial mortgages may differ significantly from residential mortgages. They often require a higher down payment and may have more stringent credit requirements. The mortgage terms can also be shorter, with balloon payments at the end of the term, and they generally have slightly higher interest rates due to the increased risk associated with commercial property investments.