Commercial Mortgage Refinance

To determine whether your commercial mortgage refinance eligible to use the below to 'preselect' your situation. Understanding your potential strengths and weaknesses of loans you will save time and ensure your best chance of a successful outcome.

Possession

Firstly, how long have you owned the property in question? Has it been less than 12 months? Unless the title is free and clear or there is sufficient equity, the lender will use the purchase price plus documented improvements you put into the property - not the appraised value.

For example, if you put down 20% last year you will not be able to draw additional funds and the risk that the loan to value rate and term refinance to 80 top outlet %.

Have you been refused by the banks? Find out why? It was just an internal problem or something they think is a problem with the transaction? It is best to lay your cards with a new potential lender in the beginning rather than later. 99% of the subscription time to discover the problem, even if you do not disclose. You want to find a source of capital that is closing, and not only work there for two months, then decline.

History and market

What was the original purchase price and realistic estimated value of real estate. When an assessment last year ended and what was the appraised value? Try not to make the typical mistake of overvaluation of the property - that you will be paying for this mistake. Calculate your net operating income and to know the current market rate cap in the field of properties. Then do some basic calculations to get an idea of the value on income.

current mortgage terms

What are your current mortgage? Are you refinancing because you want a lower rate? Amortization longer? Would you take cash? Or you have a balloon loan? What are your long term goals?

aec When do you sell?

aec What type of depreciation you?

aec Do you have a lockout period or prepayment penalty you have to treat?

aec Can new loan allow lockout and prepayment charge?



Property

What type of commercial property are you refinancing? different types of buildings from many different terms. 80% of the value of the loan agreement on a restaurant told not fund income while the value of a loan of 80% higher on an office building will be. Zoning the property will dictate which category describes your property.

If your company is about space, what percentage? Is it more than 25%? Is it 50%? Many lenders will consider it address owner occupied if you are in more than 25%. Virtually all lenders consider owner occupancy if your company employs more than 50% of the property object that will give you better terms.

Lease terms

What kind of property leases do now? Are they NNN? How does spending the tenants pay off the lease? Is there a significant amount of leases expiring in less than 2 years? Are there any credit quality tenants in the building?

It is a very good idea to prepare as discuss your mortgage refinance with commercial potential lenders. Be prepared to provide:

On the operating history and income;

rent rolls and a yearly rent;

Net operating income;

vacancy information, and

Total square footage, number of buildings and units.



Be a thorough review from the outset, early will save you time and money at the end of the mortgage refinance business.