When to refinance a commercial property
- Your loan is maturing and your current lender's renewal terms aren't competitive.
- Your rate is about to reset and you want to lock a fixed rate.
- The property is worth more after renovation or lease-up, and you want to pull cash out for your next purchase.
- You're coming off a bridge loan and need long-term, lower-cost debt.
Why refinances fall apart, and how we prevent it
Most refinance problems come down to two numbers: value and cash flow. If the appraisal comes in low or the debt service coverage ratio is too thin, the loan amount shrinks. We size your refinance up front using lenders' real underwriting, so you know what to expect before you pay for an appraisal. Try it yourself with our DSCR calculator.
When one lender's box doesn't fit, we look at others. A credit union may allow a lower DSCR, a life company may offer longer fixed terms, and a debt fund may lend against a property that's still leasing up.
What lenders will ask for
- Current mortgage statement and loan maturity date
- Rent roll and leases
- Two to three years of operating statements, plus year-to-date
- Recent capital improvements and their cost
- Personal financial statement and real estate schedule
Terms shown are typical market ranges across our lender network, not a commitment. Your actual terms come in writing after we review your deal.
Recent closings
Frequently asked questions
How much cash can I take out of a commercial property?
Most lenders cap cash-out refinances around 65% to 75% of appraised value, and the loan also has to meet the lender's minimum debt service coverage. The lower of the two numbers sets your loan amount.
Will I pay a prepayment penalty on my current loan?
Possibly. Many commercial loans carry step-down penalties, yield maintenance or defeasance. Send us your note and we'll factor the cost into whether refinancing makes sense now.
Can I refinance if my property's income dropped?
Often, yes. Some lenders underwrite to lower coverage ratios or offer interest-only periods. A bridge loan can also buy time while you restore income.
What is a good DSCR for a commercial refinance?
Most bank and agency lenders want 1.20x to 1.35x. That means the property's net operating income covers the annual mortgage payment 1.2 to 1.35 times.