Like with residential mortgages, owners can also refinance their commercial mortgages. Owners of commercial properties may choose to refinance their loan for a variety of reasons, ultimately benefiting their business model and financial well-being. Common reasons a business may choose to refinance a commercial loan include lowering a fixed interest rate, moving from an adjustable interest rate to a fixed one, or getting into a new loan before a balloon payment on an existing loan is required. In order for an owner to refinance their commercial property, they will have to produce extensive documentation showing the stability of the business and sufficient income. This documentation may include things such as balance statements, tax returns, and future income projections.
When refinancing, the borrower does not have to purchase a new Owner’s Title Policy. However, the lender, even if it’s the same lender as on the previous loan, will require the borrower to purchase a new Lender’s Title Insurance Policy. The Lender’s Title Insurance Policy can be purchased at a discounted rate. To receive this discount, the owner will simply have to provide a copy of their prior Owner’s Title Policy. Just give us a call to learn more about the cost of a commercial refinance at FGTE.