Whether you own your facility to run your business from or manage residential property that you rent out to others, you most likely have a loan to fund it. However, owning a building can be expensive, especially when something breaks, or it needs to be remodeled by your CRE developers. Much like your personal home, you can borrow against the equity to make repairs or apply for a lower interest rate. Here are a few reasons why you would want to refinance your company’s mortgage.
Reduce the Amount That You Pay Each Month
There are many expenses that happen when you own a business. Depending on your revenue at the time, it can be a challenge to pay your outstanding invoices. This would be a good time to refinance your commercial mortgage. Depending on your financial status, you could get a lower interest rate or extend the length of your payments to make them manageable. Multiple CRE developers utilize this option especially if they have several properties that they are responsible for. When your income is better and you can afford a larger amount, you can add to the total that you owe on your bill.
Make Necessary Repairs to Your Property
Over time, your properties will wear down and need repairs made to them. It can be a challenge to rent the space out to a tenant if there are higher-quality units available at the same price. Refinancing your commercial mortgage allows you to get the cash from the equity that you paid in and use it to hire developers to make necessary improvements and upgrades. Reach out to your lender and ask if this is an option for the loan that you have with them. They will be able to inform you if you qualify and how much money would be available once the process is complete.
Have the Funds to Handle the Last Payment of Your Current Loan
Much like your personal home mortgage, the final installment of your current commercial loan could be staggering. It will be difficult to afford the balloon payment, especially if it occurs at a time of the year when your sales are low. Like many CRE developers, you can avoid this situation by reapplying for assistance with your lender. Doing this can reduce what you owe to the bank and alleviate the stress that you feel to cover this dollar amount.