Refinance Your Commercial Property

Refinancing a commercial property involves replacing an existing mortgage with a new loan to improve financial terms, reduce interest rates, or access the property's equity. Property owners often seek refinancing to lower their monthly payments, extend the loan term for enhanced cash flow, or consolidate debt for more manageable obligations. Additionally, refinancing can be used to switch from a variable-rate loan to a fixed-rate one, ensuring more predictable payments.

To successfully refinance a commercial property, certain requirements must typically be met:

  • Credit History: A thorough review of the borrower's credit history to assess financial reliability.
  • Loan-to-Value (LTV) Ratio: Lenders usually prefer an LTV of 75% or lower, though this can vary based on the lender and property type.
  • Debt-Service Coverage Ratio (DSCR): A ratio of 1.25 or higher is often required to demonstrate the property's income relative to debt obligations.
  • Property Appraisal: An updated appraisal to determine the current market value of the property.
  • Financial Statements: Submission of the borrower’s financial documents to prove fiscal stability.
  • Income Proof: Evidence of steady income generated by the property.

Meeting these requirements can help secure favorable loan terms and ensure a smooth refinancing process.