Commercial Refinancing refers to the replacement of an existing debt obligation with a debt obligation bearing different terms.
Commercial Refinancing may be undertaken to reduce interest costs (by refinancing at a lower rate), to extend the repayment time, to pay off other debts, to reduce one’s periodic payment obligations (sometimes by taking a longer-term loan), to reduce or alter risk (such as by refinancing from a variable-rate to a fixed-rate loan), and/or to raise cash for investment, consumption, or the payment of a dividend.
In essence, refinancing can alter the monthly payments owed on the loan either by changing the loan’s interest rate, or by altering the term to maturity of the loan. More favourable lending conditions may reduce overall borrowing costs. Refinancing is used in most cases to improve overall cash flow. Therefore making your bills/payments lower than before.
Another use of refinancing is to reduce the risk associated with an existing loan. Interest rates on adjustable-rate loans and mortgages shift up and down based on the movements of the various indices used to calculate them. By refinancing an adjustable-rate mortgage into a fixed-rate one, the risk of interest rates increasing dramatically is removed, thus ensuring a steady interest rate over time. This flexibility comes at a price as lenders typically charge a risk premium for fixed rate loans.
Clear Mortgage can refinance your existing loan
You may start a project with one lender and then figure out that it might not be the best fit. Clear Mortgage prides itself in providing win-win, superior solutions for our clients. If we can be a better fit for you and improve on your current situation, we will. Call us today to see if Clear Mortgage can provide a better commercial refinance relationship for you. The C.L.E.A.R. Difference is real!
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