Page 6 - refi book proof 2

What is A Commercial Cash Out Refinance
A commercial cash out refinance is a mortgage loan in which the new mortgage amount is
greater than the existing mortgage amount plus loan settlement costs. The original mortgage is
retired and a new mortgage created, with the difference between old and new available as ​cash
out​ to the property owner.
By obtaining a commercial cash out refinance loan, commercial real estate owners are able to
take advantage of trapped equity in their properties and use it for other purposes.
In contrast with typical banks, working with a private source places no restrictions on what the
funds are used for. Typical bank lenders either don’t allow commercial cash out refinancing or
closely scrutinize what the money is intended for. Alternative funding sources make the funds
immediately available at closing with no questions asked.

Video~Trapped Equity

Commercial Loan Types

Let’s discuss the difference between​ ​small Balance and large Balance loans.

Small balance commercial loans are roughly between 100k-2.5million.​ ​Small balance
commercial loans are not very easy to obtain with flexible terms from traditional lenders
because these loans pose a great risk to traditional lenders that’s why they structure them with
balloon payments. this happens because the balance of the loan is so small compared to deals