Below I have mentioned few terms to become familiar with to help increase your knowledge and help become prepared and learn what to expect as you approach a Mortgage Refinance for a commercial property.

Without some familiarity pertaining to a Mortgage Refinance it could be difficult to understand where to start. Without some experience in financing, whether it’s on an initial loan or a Residential Loan, these terms may seem like foreign language or somewhat silly for such a serious matter. A few examples would be: Arm, Balloon, Bridge Loans, Mezzanine Loans, Conduit or CMBS Loans etc.

If you think back to when you applied for your original Commercial Mortgage Finance, you will remember specific terminology slightly different than that of Loan Refinance. You had to think about the price of the commercial property, the time it will take to secure a loan this size, it is possible for the amount of time specified on the contract to run out before you get funded, protection from default on such a large loan, not to mention collateral, down payment, the lenders closing costs and so on, not too unlike a mortgage on a house.

If you think back to when you applied for your original Commercial Mortgage Finance, you will remember thinking with a slightly different approach than you would with Mortgage Refinance. You had to think about the price of the commercial property, the time it will take to secure a loan this size, it is possible for the amount of time specified on the contract to run out before you get funded, protection from default on such a large loan, not to mention collateral, closing costs and so on. Things can become very complicated on a loan this size for a commercial property.

Before we move on to Loan Refinance terms let’s recap what terms you had to learn before, such as 1031 Tax Exchange, Environmental Reports, what type of commercial property qualifies for what type of loan, which is a lot for one to learn, the difference between Conduit and Mezzanine Loans, and so on.

It is very important to find a great Broker that offers a variety of innovative loan programs for your specific need. So now, it is time to look at Loan Refinance. Things may become very complicated on a loan for a commercial property.

The cost to complete a Mortgage Refinance for a commercial property can turn out to be quite high if you were under the impression it would be less than an original loan. An appraisal can run between $2,000 – $5,000, Title between $800 – $2,000, Phase One Environmental Report around $2,000 and lender processing fees around $1,000.

Remember, knowledge is power, stay informed by reading and researching your topic. Be very clear about your reasons for Mortgage Refinance so you won’t make mistakes that could cost you more in the long run.