Become Familiar with Mortgage Refinance
Mortgage Refinance on a commercial property can be tricky, but it is possible to prepare yourself by becoming familiar with how the process works, what to beware of and some of the terminology, this will help you understand what to expect at the same time increasing your knowledge.
Without some familiarity pertaining to a Mortgage Refinance it could be difficult to understand where to start. Without some experience in financing, whether it's on an initial loan or a Residential Loan, these terms may seem like foreign language or somewhat silly for such a serious matter. A few examples would be: Arm, Balloon, Bridge Loans, Mezzanine Loans, Conduit or CMBS Loans etc.
If you think back to when you applied for your original Commercial Mortgage Finance, you will remember thinking with a slightly different approach than you would with Mortgage Refinance. You had to think about the price of the commercial property, the time it will take to secure a loan this size, it is possible for the amount of time specified on the contract to run out before you get funded, protection from default on such a large loan, not to mention collateral, down payment, closing costs and so on, not too unlike a mortgage on a house. Things can become very complicated on a loan this size for a commercial property.
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 we move onto Mortgage Refinance terms let's recap what terms you had to learn before, such as 1031 Tax Exchange, Environmental Reports, what type of commercial property qualifies for what type of loan, which is a lot for one to learn, the difference between Conduit and Mezzanine Loans, and so on. Most importantly, you had to find a great Broker that offers a variety of innovative loan programs for your specific need. So now, it is time to look at Mortgage Refinance.
You will find out some things are a little different when it comes to Mortgage Refinance. The terminology is a little bit different. You start looking at possible Cash Out Proceeds, and maybe you want to "inject" the money you cash out into another property or use it to remodel the current property, what is the Discounted Cash Flow, Current vs. Proposed, will you have prepayment penalties?
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.
Remember that knowledge is power, so stay informed by reading and researching your topic.
Without some familiarity pertaining to a Mortgage Refinance it could be difficult to understand where to start. Without some experience in financing, whether it's on an initial loan or a Residential Loan, these terms may seem like foreign language or somewhat silly for such a serious matter. A few examples would be: Arm, Balloon, Bridge Loans, Mezzanine Loans, Conduit or CMBS Loans etc.
If you think back to when you applied for your original Commercial Mortgage Finance, you will remember thinking with a slightly different approach than you would with Mortgage Refinance. You had to think about the price of the commercial property, the time it will take to secure a loan this size, it is possible for the amount of time specified on the contract to run out before you get funded, protection from default on such a large loan, not to mention collateral, down payment, closing costs and so on, not too unlike a mortgage on a house. Things can become very complicated on a loan this size for a commercial property.
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 we move onto Mortgage Refinance terms let's recap what terms you had to learn before, such as 1031 Tax Exchange, Environmental Reports, what type of commercial property qualifies for what type of loan, which is a lot for one to learn, the difference between Conduit and Mezzanine Loans, and so on. Most importantly, you had to find a great Broker that offers a variety of innovative loan programs for your specific need. So now, it is time to look at Mortgage Refinance.
You will find out some things are a little different when it comes to Mortgage Refinance. The terminology is a little bit different. You start looking at possible Cash Out Proceeds, and maybe you want to "inject" the money you cash out into another property or use it to remodel the current property, what is the Discounted Cash Flow, Current vs. Proposed, will you have prepayment penalties?
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.
Remember that knowledge is power, so stay informed by reading and researching your topic.
About the Author:
This Article is brought to you by EFD Commercial InvestmentsINC. For More information about Mortgage Refinance Options Contact them at info@efdcommercial.com. Click here to Submit Article
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