Understanding Commercial Mortgage Modification

Introduction

Many businesses are struggling financially. These struggles could be because the company is just starting and hasn’t yet ramped up its revenue to a sustainable level. The market or the economy might have changed, causing the business (or even the industry) to struggle. Right now, there are likely many businesses working desperately to meet their financial obligations due to restrictions related to the COVID-19 crisis.

Whatever the cause, financial hardship can be stressful for business owners. If you are a business owner struggling to pay the bills, and if you have commercial mortgage debt that you are having difficulty paying, it might be worth considering a Commercial Mortgage Modification as you seek to create some breathing room for yourself and your business.

What are commercial mortgage modifications?

A loan modification on a business mortgage involves changing the existing loan terms of your debt so that it isn’t such a hardship for you to pay back. There are several ways that a loan modification can achieve this. Most involve reducing the monthly payment or extending the term on your existing commercial mortgage debt by adding more time before an amount comes due. These changed terms can allow the owner of a commercial property to continue ownership despite financial hardship. Working with commercial real estate lenders on a mortgage modification may be a preferred outcome rather than allowing the commercial real estate lender to foreclose and take possession of the property.

How do you know if you need a mortgage modification?

You may want to consider loan modifications if you are struggling to make monthly payments on your current commercial mortgage loan. Please reach out for assistance right away, as it is much easier to work with the lender before they foreclose than after. The best way to know what works for you and your situation is by talking directly with someone who has experience in the lending and credit fields.

What are the benefits of loan modifications?

A commercial mortgage loan modification can help you reduce your monthly payments and interest rate, protect assets against foreclosure or bankruptcy proceedings, and give you more time to get back on track. There are several different types of modifications that may work for your situation depending on whether you have defaulted on other debts or have other negative credit issues on record.

Who can get a commercial mortgage modification?

Commercial mortgage modifications are a potential option for business owners who currently have a loan from one of the many commercial real estate lenders and are struggling to make regular payments. The better your credit history is, the more likely you are to qualify for a loan modification. If you are struggling to meet your business bills, your credit rating may reflect these damaging issues. So don’t wait until you have a long history of late or missed payments. There may also be some practical things that you can do to make sure your credit profile is in good standing.

Another factor that relates to whether or not you will be able to get a loan modification will be your lender’s policies. There are many lenders, and different commercial real estate lenders may have different standards for who qualifies for loan modifications. You can probably learn more about what your lender requires by contacting them.

When should borrowers apply for commercial loan modifications?

There may not be a one-size answer to this question. If you have been late on some payments or your credit score is low, it may make sense for you to apply for a loan modification as soon as possible. However, if there has not been much fluctuation in your income or expenses recently and these factors seem stable in the future, it might make more sense to ride it out a while longer. Just make sure, if you decide to wait it out for a while, that you can pay your loan obligations on time. One of the things you absolutely should not do is try to wait too long and pull your credit score down in the process.

Where can I find more information about getting a Mortgage Modification?

Schedule a free consultation with Lion Fortress Credit to discuss your commercial loan and your current credit situation. We can help you determine whether a loan modification might be a good fit for your business. Suppose you are concerned that it might be too late or that your credit score might be a roadblock to renegotiating the terms of your commercial loan. In that case, Lion Fortress can also help you deal with these issues as you prepare to access a loan modification from your commercial real estate lender.

Conclusion

A commercial mortgage modification is a loan agreement that changes the terms of an existing mortgage to make it more manageable. There are many benefits to getting a commercial mortgage loan modification, such as lower monthly payments and reduced interest rates. It’s also crucial to note that not everyone will qualify for this type of financial relief; qualification depends on your situation and financing company requirements. If you think you may need assistance with your current commercial real estate financing, schedule your free consultation with Lion Fortress Credit. We can work together to determine if a commercial mortgage loan modification is suitable for you!

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