Below I have mentioned few terms to become familiar with to help increase your knowledge and help become prepared and learn what to expect as you approach a Mortgage Refinance for a commercial property.
Two of the main reasons people look at Mortgage Refinance, is to help reduce monthly payments and interest, in my opinion one of the most important items to look at is how closing costs will affect the equity you have built over the years.
Long before I became involved in Real Estate, I would hear terms mentioned in regards to Residential and Commercial Loans and Mortgage Refinance options, ARMS, Balloons etc. I was just getting started in this industry and had absolutely no experience in any real estate or financing, so these terms were like a foreign language. I realized very quickly that without thorough knowledge of the terminology it is hard to understand what direction you will go.
Now that you have experience, when learning the thought process behind Mortgage Refinance in the next paragraph, you will see the difference in thought from your original loan. The most prominent reasons people look at Mortgage Refinance are because of taxes, facing a ballooning loan or to help reduce monthly payments and interest. And it may also reduce the life of the loan.
You had to make sure you can handle such an obligation by speaking to your Financial Advisor and your Accountant about how long your finances could carry the loan if things don't go as planned before ever thinking of moving onto Mortgage Refinance.
Do a simple break even analysis to compare costs of other lenders versus your existing bank. If they know you are looking for a Mortgage Refinance, your current bank may offer to reset the loan.
The cost to complete a Mortgage Refinance for a commercial property can turn out to be quite high if you were under the impression it would be less than an original loan. An appraisal can run between $2,000 - $5,000, Title between $800 - $2,000, Phase One Environmental Report around $2,000 and lender processing fees around $1,000.
Successful Brokerage firms will want to share information with you. Remember, knowledge is power, stay informed by reading and researching your topic. When looking for a Broker don't hesitate to ask how long they have been in business and their approval vs. denial ratio.
Two of the main reasons people look at Mortgage Refinance, is to help reduce monthly payments and interest, in my opinion one of the most important items to look at is how closing costs will affect the equity you have built over the years.
Long before I became involved in Real Estate, I would hear terms mentioned in regards to Residential and Commercial Loans and Mortgage Refinance options, ARMS, Balloons etc. I was just getting started in this industry and had absolutely no experience in any real estate or financing, so these terms were like a foreign language. I realized very quickly that without thorough knowledge of the terminology it is hard to understand what direction you will go.
Now that you have experience, when learning the thought process behind Mortgage Refinance in the next paragraph, you will see the difference in thought from your original loan. The most prominent reasons people look at Mortgage Refinance are because of taxes, facing a ballooning loan or to help reduce monthly payments and interest. And it may also reduce the life of the loan.
You had to make sure you can handle such an obligation by speaking to your Financial Advisor and your Accountant about how long your finances could carry the loan if things don't go as planned before ever thinking of moving onto Mortgage Refinance.
Do a simple break even analysis to compare costs of other lenders versus your existing bank. If they know you are looking for a Mortgage Refinance, your current bank may offer to reset the loan.
The cost to complete a Mortgage Refinance for a commercial property can turn out to be quite high if you were under the impression it would be less than an original loan. An appraisal can run between $2,000 - $5,000, Title between $800 - $2,000, Phase One Environmental Report around $2,000 and lender processing fees around $1,000.
Successful Brokerage firms will want to share information with you. Remember, knowledge is power, stay informed by reading and researching your topic. When looking for a Broker don't hesitate to ask how long they have been in business and their approval vs. denial ratio.
About the Author:
This article is brought to you by the experts at EFD Commercial Investments Inc. For more free information about loan refinance, visit their Mortgage Refinance page.
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