Things to Consider When Thinking of Mortgage Refinance
Below I have mentioned some terms you may want to become familiar with to help increase your knowledge and help you become prepared as you approach a 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 yourself for what to expect.
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.
If you think back to when you applied for your original Commercial Mortgage Finance, you will remember specific terminology slightly different than that of 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 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.
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. It is very important to look at how closing costs will affect the equity you have been building over the years. Your situation is a little different and you will need to approach the Mortgage Refinance accordingly. You will now start looking at possible Prepayment Penalties, Cash Out Proceeds, and maybe you want to Inject the money you cash out into another property or update your current property, what is the Discounted Cash Flow, Current vs. Proposed Loan to Value Ratio. 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
The terminology is somewhat different when it comes to Mortgage Refinance. You start looking at possible Prepayment Penalties, Cash out Proceeds, and maybe you want to inject the money you cash out into another property or update your current property, what is the Discounted Cash Flow, Current vs. Proposed Loan to Value Ratio.
It is very important to look at how closing costs will affect the equity you have been building over the years. Two of the biggest reasons people look at Mortgage Refinance, are 1. To get a lower interest rate than they currently have, this means lower monthly mortgage payment (less payment more, more cash in your pocket). Second reason people refinance their mortgage is to "cash out" some of the equity they built in time and invest it in a new project.
Remember that knowledge is power, so stay informed by reading and researching your topic.
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.
If you think back to when you applied for your original Commercial Mortgage Finance, you will remember specific terminology slightly different than that of 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 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.
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. It is very important to look at how closing costs will affect the equity you have been building over the years. Your situation is a little different and you will need to approach the Mortgage Refinance accordingly. You will now start looking at possible Prepayment Penalties, Cash Out Proceeds, and maybe you want to Inject the money you cash out into another property or update your current property, what is the Discounted Cash Flow, Current vs. Proposed Loan to Value Ratio. 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
The terminology is somewhat different when it comes to Mortgage Refinance. You start looking at possible Prepayment Penalties, Cash out Proceeds, and maybe you want to inject the money you cash out into another property or update your current property, what is the Discounted Cash Flow, Current vs. Proposed Loan to Value Ratio.
It is very important to look at how closing costs will affect the equity you have been building over the years. Two of the biggest reasons people look at Mortgage Refinance, are 1. To get a lower interest rate than they currently have, this means lower monthly mortgage payment (less payment more, more cash in your pocket). Second reason people refinance their mortgage is to "cash out" some of the equity they built in time and invest it in a new project.
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
posted by Debt Consolidation Loan at
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