Commercial Mortgage Refinance – 6 Issues That Can Kill Your Deal
There are many potential issues which can “kill” or delay your corporate mortgage refinance. Some issues might delay the process by some days while others may completely eliminate the interest of lenders to refinance your loan. Here are 6 issues that can kill your commercial mortgage refinance deal.
1. Title Problems
A forgotten title lien can majorly impact closing. Perhaps the lien’s dollar amount is substantial and can’t be rolled into loan amount. The lien may also be challenged by borrower and should get that resolved/removed before getting the funds from lender.
When the term-sheet of loan is negotiated by lender and borrower, loan to value ratio is the most important component to be considered. Besides frustration of the cancelled loan, there can also be a disagreement about the way of determining the value. Since appraisal reports can’t be believed, New City Financial can help you decide which recent sales should be used for comparison.
3. Sudden Business Change
Lenders refer this as “Adverse Change”. It means some kind of change from the borrower side from the loan approval time. This usually takes 90-120 days and in that time, much wrong things can happen.
4. Environmental Issues
It is a huge setback for any lender when a property is taken back because of environmental issues. Nobody wants to be stuck with the property’s cumbersome processes and bills. There also remains the possibility that the neighbours might sue. These issues decrease the value of real estate properties.
If the property faces some kind of damage or any of the partners die, then the refinancing can be substantially delayed.
The insurance of subject property is necessary. Some people might find it painful but many refinancing projects get delayed only because of lack of insurance. This is a relevant problem when it is about seller refinancing or refinancing out of private mortgages. There are several private lenders who don’t care about the insurance issue.
That’s why it is important to get the commercial mortgage refinance services from a reputable source like New City Financial.