Why Commercial Mortgages Fail to Refinance
The need for money may arise at any point of time when you are running a business. This is especially true if your business is in an expanding phase. In this modern world, no business can survive without expanding. Hence as a businessman you will have to raise the required amount in the stipulated time for the business to be able to flourish. Mortgaging company property is the best method to get the money but in most cases all the company properties will already be mortgaged. Hence the only possible solution will be to refinance the existing mortgages. Some reasons that cause the refinancing to fail are:
Moving to a new bank may prove to be disastrous:
There is a provision that can be used to transfer the commercial mortgage from one bank to another. Customers usually do this during refinancing because the new bank may offer a better rate than the existing bank. But you must make sure that all the details about the new bank are studied precisely before making the transfer. This is because there are chances that there are hidden terms and conditions in the new bank that may prove to be problematic for you.
Refinancing without thinking about the incomes:
When going for a refinance, you must make sure that you will be able to afford the additional rates. If this is not the case, there are chances that the business that you run would fall into chaos. In extreme cases, you may even end up losing the property that has been mortgaged.
Know about all the schemes:
There are numerous refinancing schemes in each bank. And in most cases the employees at the bank may not explain all of them to you. So it is up to you to research and find out about each and every scheme. Visiting an expert in the field of commercial financing would be really helpful. Also the internet can be used to know about the bank’s loan schemes.