Rate And Term Refinance
rate & Term Refinance
Rate and term refinancing is a financial strategy used in commercial real estate to replace an existing loan with a new one that offers improved terms, such as a lower interest rate, extended repayment period, or different loan structure. Unlike cash-out refinancing, this type of refinancing does not provide additional cash to the borrower but aims to reduce costs or adjust the loan to better align with the borrower’s financial goals.
Considerations Before Choosing Rate and Term Refinancing
- Current Interest Rate Trends – Ensure refinancing results in significant savings.
- Closing Costs – Assess fees such as appraisal, legal, and loan origination fees.
- Loan Qualification Criteria – Review credit score, DSCR, and lender requirements.
- Break-even Period – Calculate how long it will take to recover refinancing costs through savings.
- Prepayment Penalties – Check if the existing loan has penalties for early payoff.
- Dedicated Client Support
- Competitive Rates & Terms
- Tailored Financial Solutions
- Fast & Easy Application Process
- Access to a Broad Lender Network
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How Does Rate and Term Refinancing Work?
- New Loan Issued – A lender provides a new loan based on the property’s current market value and the borrower’s financial profile.
- Old Loan Paid Off – The new loan is used to settle the outstanding balance of the existing loan.
- New Loan Terms Take Effect – The borrower continues making payments under the revised loan terms, which may include a lower interest rate or extended repayment period.
For example, if a commercial property owner has a loan with a 7% interest rate and can refinance to a 5% interest rate, they can significantly lower their monthly payments and total interest costs over the life of the loan.
Benefits of Rate and Term Refinancing
✅ Lower Interest Rates – Reduce monthly payments and long-term borrowing costs.
✅ Improved Loan Terms – Extend repayment periods to increase cash flow flexibility.
✅ Debt Consolidation – Refinance multiple loans into a single, more manageable loan.
✅ Switch Loan Types – Move from adjustable-rate to fixed-rate loans or vice versa.
✅ Avoid Balloon Payments – Refinance before a balloon payment is due to spread costs over a longer period.
We specialize in rate and term refinancing across all 49 states. Our competitive rates, flexible terms, and quick approval process are designed to help you succeed. Whether you’re a seasoned investor or new to the market, we’ll work with you to structure a loan that fits your project’s unique requirements.
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Rate & Term Refinance
How much can I save by refinancing my commercial loan?
Savings depend on the difference in interest rates and loan terms. Lower rates or longer repayment terms can reduce monthly payments and total interest costs.
Can I refinance if I have bad credit?
Yes, but options may be limited. Lenders may require additional collateral or charge higher rates for lower credit scores.
How long does the refinancing process take?
It typically takes 30-90 days, depending on the lender and complexity of the loan.
Are there penalties for refinancing?
Some loans have prepayment penalties, so it’s important to review your current loan terms before refinancing.
Can I refinance into an SBA loan?
Yes, SBA 7(a) and 504 programs allow refinancing under certain conditions, such as improving loan terms for small business owners.
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Rates as low as 8% to 12%
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Loans from $75K to $5M+
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Up to 85% for Purchase and Rate & Term Refinances, Up to 75% for Cash Out Refinances
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Fixed/Adjustable 5, 7, 10-year
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