Commercial Refinance: When is the right time?

Commercial Refinance When
Commercial Refinance

When #1 – A new loan opportunity with lower rates and better overall terms

The refinancing of your commercial property loan makes the most sense when you’ve found a better investment. What does this mean? An investment that provides lower rates and longer terms is a great time to seize the refinance opportunity. By taking such a loan, you end up saving more in the long run, and your overall loan expense would decrease in a lower interest solution.

When #2 – A new loan that can help you take advantage of and stay stable even when the changing market starts fluctuating

Most commercial refinance options are 5-7-10 years and then you refinance. What if you could have a 30-year fixed product for your commercial property?

Making a shift can help you save a lot in the long run. Such changes and fluctuations could be one of the reasons why you should refinance your commercial property loan.

You’ll have security and stability for 30 years. You’ll be able to ride out the storms of economic ups and downs.

When #3 – Refinancing helps reduce the monthly loan payments

Some investors struggle with making their monthly payments on time (especially now). Although there could be many reasons behind this, one of the primary reasons is the inadequate rental income that the property generates.

Some investors misjudge their projected monthly rental income statements and thus make the wrong decision with respect to choosing the right loan, from the beginning.

When #4 – Refinancing can help generate higher cash flow from a commercial property

The three previous reasons help save on costs. This one is about boosting revenue by creating higher cash flow from a commercial property. This happens when an investor decides to take cash out on refinancing.

A cash-out refinance, can provide you with funds that you can use to make repairs, add more areas and amenities like a garden, laundry area, better parking space, etc. which can justify the rental increase.

If planned and executed well, refinancing can work wonders in generating a higher cash flow from your commercial property and keep your tenants pleased.

When #5 – Refinancing lets investors dodge the hefty balloon payment that needs to be paid near the end of an existing mortgage

Most Commercial Property loans come with a massive balloon payment that is to be made at the end of the loan term. Some investors may not be in a position to pay this expense and would need to do simply refinance the debt.

A 30-Year Fixed commercial loan can help. Refinancing would be completely unnecessary unless a lower rate comes along.