Getting Started with Mortgage Refinance
Below I have mentioned some terms to become familiar with to help increase your knowledge and help you become prepared and learn what to expect as you approach a Mortgage Refinance for a commercial property.
Long before I became involved in Commercial Financing and Real Estate Development, I would hear terms mentioned in regards to Residential and Commercial Loans and Loan Refinance options, ARMS, Balloons etc. I had absolutely no experience in any real estate or how to acquire a mortgage loan, so these terms were like a foreign language to me. I realized very quickly 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 some what different than that of Loan 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 big loan, not to mention collateral, down payment, the lenders closing costs and so on, not too unlike a mortgage on a house.
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.
Before we move on to 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.
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 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.
Remember, knowledge is power, stay informed by reading and researching your topic. Be very clear about your reasons for Mortgage Refinance so you won't make mistakes that could cost you more in the long run.
Long before I became involved in Commercial Financing and Real Estate Development, I would hear terms mentioned in regards to Residential and Commercial Loans and Loan Refinance options, ARMS, Balloons etc. I had absolutely no experience in any real estate or how to acquire a mortgage loan, so these terms were like a foreign language to me. I realized very quickly 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 some what different than that of Loan 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 big loan, not to mention collateral, down payment, the lenders closing costs and so on, not too unlike a mortgage on a house.
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.
Before we move on to 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.
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 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.
Remember, knowledge is power, stay informed by reading and researching your topic. Be very clear about your reasons for Mortgage Refinance so you won't make mistakes that could cost you more in the long run.
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.
posted by Debt Consolidation Loan at
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