3 Things You Need To Know About Refinancing Your Commercial Mortgage
If you run your own business or regularly work with CRE developers, you may be looking to refinance your commercial real estate mortgage. While commercial properties are generally a strong investment that appreciates over time, mortgage payments can sometimes become burdensome to owners. Whether you’re looking to reduce your debt, tap into the property’s equity or simply free up more cash for your day-to-day business operations, refinancing could be a good option. While the process might seem complicated at first, it doesn’t have to be! There are a few key facts about refinancing your commercial mortgage that can help you tackle it with confidence.
1. Your Property Secures Your Loan
One of the key ways in which your commercial mortgage differs from one for a residential property is that it essentially acts as a business loan in which the loan is secured by the property itself. Whether your company uses your property directly, as is the case for office space, warehouses, factories or retail stores, or if you use the property as a rental or for other investment purposes, you can qualify for a commercial mortgage. Depending on your needs, you can get a mortgage term of anywhere from one to thirty years.
2. Refinancing Could Get You Lower Rates
One of the main reasons to consider refinancing is that it could help you take advantage of periods when lower interest rates are being offered. While it might not seem like much at first, even slightly lower rates can end up saving your company significant amounts of money over time. Additionally, if you currently have an adjustable rate, you may be able to get a fixed rate, helping to stabilize your budget and give you peace of mind when the bills come due every month.
3. There Could Be Associated Fees
Finally, keep in mind that even if the mortgage refinancing saves you money over time, you may still have to put some cash in to begin with. This is because many refinancing deals require up-front fees in order to secure the new rates. Be sure to check whether the gain is still worth it based on the associated fees.
Owning a commercial property can be a smart investment move for business owners and CRE developers, but sometimes, commercial mortgages can become a financial or logistical burden. If this is the case, you may want to consider refinancing and the benefits it could have for your company. Keep these simple tips in mind and you can work towards getting a refinanced mortgage that fits your company’s needs.
