Commercial Mortgage Refinancing
“Toronto Commercial Mortgage Refinancing Can Be More Challenging Than You Think”
Unlike residential mortgage refinancing scenarios, Toronto commercial mortgage refinancing situations are not as subject to automatic or near automatic renewals and in fact, its not unusual for commercial lenders to pull in and out of markets according to a number of different factors including the strength of the overall economy, strength of the specific industry paying the bills, and strength of their portfolio.
Plus commercial property mortgages come with more strings including operating statement covenants that if broached can lead to a timely demand for mortgage repayment at renewal time.
Even if you never missed a payment during the interest period, stayed completely on side with your covenants, and were an upstanding borrower all the way through, you still could be served with a payout statement a few months before your mortgage term comes due.
This may not be all bad in that you could end up with an even better mortgage in terms of rates and fees with another commercial mortgage lender. But the grief that you may need to go through to get the mortgage relocated can be considerable. If you are offside with some of the mortgage conditions, then it may be that much more difficult to move to another lender without having to pay a higher rate of interest,
The larger the commercial funding amount, the more stringent the requirements are going to be with a new lender. Things like environmental regulations are constantly evolving. What was acceptable on your site at the time the current mortgage was issued may not be accept now. The environmental standard being applied at a given time can also vary from one bank or institutional lender to another.
There are two things you can do to increase the probability that your long term property financing needs don’t get derailed expectantly.
First, assume nothing and start early. Make sure that all the information you will be expected to provide for the existing mortgage holder, or an alternative, is up to date 6 months before the end of the mortgage term so that all your potential options can be considered.
Second, work with a commercial mortgage broker that can provide you with the market insight that can be hard to come by when you’re not at least knee deep in the Toronto mortgage refinancing market on a daily basis.
Click Here to Speak With Toronto Commercial Mortgage Broker Joe Walsh
About the Author Joe Walsh
I'm a Toronto Mortgage Broker that arranges mortgage solutions on residential and commercial real estate property. With over 30 years of mortgage financing experience, I'm able to quickly assess your financing requirements and provide relevant solutions for your immediate consideration. Joe Walsh Google+ YouTube Channel