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| Mortgage Refinance Process |
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| Written by Madeline Zidan |
| Friday, 16 January 2009 10:53 |
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When thinking of a Mortgage Refinance for a commercial property, you may want to consider becoming familiar with the terminology to help understand how the process will play out. This will increase your knowledge and help you prepare for what to expect. 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. The initial thought process you had used before will be slightly different from the one used to prepare for a Mortgage Refinance. You had to think about the time it will take to secure a loan this size. It is possible for the amount of time specified on the contract to purchase could expire 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. Although, some of these items are the same, it can become very complicated on a loan this size for a commercial property as you get further along. 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, closing costs and so on. Things can become very complicated on a loan this size for a commercial property. Before we move on to Loan 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. 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. 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? It is very important to look at may closing costs will affect the equity you have been building over the years. Two of the biggest reasons people look at Loan Refinance, are to get a better interest rate than they currently have, this means lower monthly mortgage payments (lower payment means extra cash in your pocket) and the second reason people refinance their mortgage is to "cash out" some of the equity they may have built over time and invest it in a new business venture. Remember that knowledge is power, so stay well-informed by reading and researching your topic. 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. Kindly provided by LJ-Marketing.dk You are welcome to use this article on your own website, if you include the link just before this text. |
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