The Top 4 Reasons That Make Refinancing Your Commercial Mortgage Advisable
There are various ways to refinance your commercial mortgage. Some of these can even improve your business’ financial situation if implemented correctly. Here are four reasons why it is advisable to refinance your commercial mortgage.
Lower Interest rates
One of the reasons why you would want to refinance your commercial mortgage would be your total loan cost being reduced right? Who wouldn’t want their loans reduced? If the market interest rates suddenly nosedives like what has been happening these past years, your business can save thousands of dollars which comes in a form of low interest rates.
Stay Away From Balloon Payment
You always see the word balloon payment always attached to most loans. With these type of loans, a large part of the balance stays until the loan period expires. Most businesses however, have a hard time paying the final payment which is the balloon payment. When this time comes, refinancing your commercial mortgage is a better solution than giving that final balloon payment.
Cash Out Refinance
If the you own the majority of the commercial property then there is a possibility ti turn a small amount of that into cash. You can use this cash for other purposes. Most business owners who do this type of refinancing usually use their cash on renovating the commercial property or they use it as additional working capital, which ever you pick between the two, it will surely help your business.
Returning to Fixed Rate
Most business owners tend to get commercial loans, they prefer the ones with adjustable rates so they can keep the costs down or take advantage of the low interest rates which are readily available out there. But the problem rises once the interest rates begin to rise or when the low rates are about to end. This scenario will surely make adjustable rate commercial mortgages quite expensive. In addition to this, frequently adjusting your rates would make your monthly payments a bit hard to predict. Refinancing your loan from an ARM loan to fixed rate commercial mortgage would be a big help since it is more predictable.
You can visit newcityfinancial.com for more information about commercial mortgages and different types of other loans.