Opening of Ace Hardwood Store. Loan provided by Commercial Loan Direct.
Find out if refinancing your commercial mortgage is right for you. Use our refinance calculator to see how much you can save by refinancing your current mortgage.
Commercial Loan Direct offers two apartment construction loan programs:
Factors such as prepayment penalties, goals of the borrower, market rates, and existing mortgage terms come in play. Of course there's no exact formula, but below are some thoughts on how you might analyze your mortgage refinance.
The Discounted Cash Flow method is the traditional system used, which essentially compares the existing mortgage vs. the proposed loan on a Net Present Value basis.
Most borrowers are obviously interested in improving their cash flow situation when refinancing. There's essentially only 2 ways to do this - reduction of interest rate and or increasing the length of the loans amortization schedule. That's it. Reducing the interest rates is obvious however most borrowers are surprised to learn that by spreading out a loan from say 20 years to 30 years normally reduces the borrower's payment by approximately 20%.
Borrowers that are facing a ballooning mortgage may find out, however that their situation will not improve. Their monthly payment may go up as markets rates change, mortgage programs change etc. It is often the case as well that the borrowers books are not as strong as there where when they secured their existing mortgage and they will not be offered the same program/rates that they previously qualified for.
Borrowers are always very concerned about closing costs, and for good reason. For example with appraisals ranging from $2,000 - $5,000, environmental reports from $1,800, processing at around $1,000, title from $1,000 - $2,000, and the bank 1% fee, it makes a lot of sense for borrowers to be concerned. On a refinance, the borrower can normally roll most of these's costs into the loan amount. In terms of out of pocket costs, the borrower should be prepared to pay the appraisal, and environmental report fees upfront. In addition, sometimes the funding bank will require the processing fee paid upfront as well.
Assuming there is a reduction in monthly payments, borrowers like to do a cash flow analysis to see how long it will take for the savings to pay back their closing costs. For example, if the new loan monthly payment is $2,000 lower and the total closing costs are $10,000 it will take 5 months for the borrower to "break even".
Principal pay down is obviously another important component of any mortgage. However, for most owners, especially those with highly leveraged properties, cash flow is more pressing. High debt payments versus net cash after the expenses have been paid make it difficult for the borrower to look at this in any other way.
Not sure which program is right for you? Contact a mortgage expert at 1-800-687-0797 and let us help you make the right decision. Our Financial Center provides helpful tips and online tools designed to assist borrowers with the refinancing of their properties.
Enter the balance of your mortgage: (call your mortgage lender and ask for the current payoff amount)
Enter the amount of your monthly mortgage payment: (principal and interest portion only)
Enter your mortgage's current interest rate:
Enter interest rate you will be refinancing at:
Enter the number of years you will be refinancing for:
Enter the closing costs that will be required for refinancing:
This is how much your monthly payment will be if you refinance:
Monthly Savings:
Number of months to break even on closing costs:
This is how much interest you will pay under your current monthly payment plan:
This is how much interest you will pay under your refinanced monthly payment plan:
This is how much interest you will save if you refinance:
Net Refinancing Savings (interest savings less closing costs):
What Clients Say About Us
Fernando and Leanne are amazing. I had many small businesses that need refinancing over the years. I have met many Brokers and there is always a catch. ALWAYS!… Use them! Once you do you will work with them forever
- Nirav Patel
If you searching for a great experience Commercial Loan Direct is the place. Leanne took care of me and honestly had the greatest experience. She handled all of my needs in a smooth and timely manner listened and addressed any concerns I had about the process and was very patient. I can be quite a handful at times and Leanne was so professional and kind hearted. I'd 100% recommend this company. Thank you again.
- Vincent Arias
We were in unfamiliar territory when it came to refinancing. Commercial Loan Direct streamlined the whole process for us. Leann connected us with lenders that were the right fit for us. The money and time we saved was so worth it. I highly recommend them
- Rita Pisarski
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