Why Refinance can be stopped
There are a few factors that could prevent your commercial property refinance from going through. You should get these cleared.
Six Reasons That Could Stop Your Refinance
There could be a problem with the title itself. There could be a lien on the property which has not been canceled on the title. Another reason could be the dispute on the value of the lien which has to be resolved by the borrower.
The Loan to Value Ratio plays an important role in sanctioning the refinance loan. This is the main point on which the negotiation takes place. There is no point finding the appraisal to be higher than the permitted limit. Consult with a private lender and get the advise on the right recent sale to be taken into consideration.
Any change in your business during the period from your application and release of the loan could affect you badly. If you had made any major purchases in that period for your business purposes and that loan reflects on your account.
Even if purchased on personal guarantee this will show your repayment capacity to have lowered from the time you applied for the loan. This will certainly put a stop to your loan.
Any environmental issues your property might have is enough reason for the lender to stop your loan. If in case he must take back the property for some reasons, he doesn’t want to be stuck with a property for which the value has come down drastically.
The neighbors may file a case. This could lead to more problems and more expenses. You could end up paying for all the tests and still end with a loan which you never got.
If some damage happens to the property or if one of the partners dies, this will certainly affect the loan.
Another important point is insurance. Most people assume the property will be insured as is mandated, but there are many cases where it is not insured. You need to take care of this.
Consult a good private lender and get all your things clarified.