With interest rates fluctuating and market conditions constantly evolving, now could be the right time to refinance your commercial real estate loan. Whether you’re looking to lower your rate, tap into equity, or secure better terms, having the right strategy in place is key to a smooth and successful refinance.
Why Refinance?
Refinancing a commercial mortgage can provide several advantages, including lower monthly payments, access to capital for renovations or expansion, improved loan terms, and debt consolidation. But before moving forward, lenders will expect a well-prepared loan package that demonstrates your financial strength and the viability of your property.
What Lenders Look For
Lenders want to see that your property generates enough income to support the new loan. Updated rent rolls, operating statements, and a strong debt service coverage ratio will all play a role in approval. Your property’s current market value is also important, as it determines your loan-to-value (LTV) ratio. If an appraisal is required, having recent sales comps and documentation of capital improvements will help strengthen your case.
Financial & Credit Requirements
A clean financial and credit history is another key factor in refinancing. Lenders will review both business and personal finances, including tax returns, credit reports, and bank statements to verify liquidity. If you’re taking cash out, be ready to explain how the funds will be used. A business plan or renovation budget may be required, along with documentation on existing debts if consolidating multiple loans. Clear title and adequate insurance coverage will also need to be confirmed before closing.
Timing Matters
With today’s uncertain rate environment, timing is everything when it comes to refinancing. If your loan is maturing, your rate is significantly higher than today’s market, or you need access to cash, refinancing could be a smart move. At Bennett Capital Advisors, we specialize in helping investors and business owners navigate the refinancing process with tailored loan solutions that fit their needs.
Explore Your Options
If you’re considering refinancing, reach out today to discuss your options. A well-executed refinance can strengthen your financial position, unlock capital, and set you up for long-term success.
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