I’m just going through the motions of having a commercial property refinanced to release some security I have in it. The bank wants a copy of the lease, which I have pulled out of the file.
Now the original lease was for 24 months from 1st August 2002, with 5 12 month options after that. CPI increases every 12 months and tenant pays outgoings.
The original lease has now expired 14 months ago so now we are on option number 2. Should I have a new lease drawn up w/regards to the option or does the original lease agreement suffice. I’m thinking perhaps I should have an official letter signed by the tenant saying they are taking up the option. Is that normally the case? Because if they bank is going to ask for that straight away I guess I need to get it done before providing them with the lease.
_____________________________
We all need somewhere to live – but do we all need a CBD apartment?Brc,
Interesting question, I dont personally know the answer, but my guess the bank would look on it better if a new lease was done.
Maybe guru Dazzling may reply
Well, the valuation is getting done today. Interestingly though, even though it is costing ME a couple of hundred dollars, the bank won’t tell me the valuation figure. It’s like paying to see a movie and then being told you have to stand in the foyer and listen to people coming out of the theatre to get an idea of what the movie was like.
Anyway I’m pretty sure the banker will tell me a rough ‘guide’ to the value because they have to tell you what the maximum lend will be. Doesn’t take much mathematics to work backwards from there.
I submitted the lease without any extra documentation regarding the taking up of the option, no word yet but I’ll post here on the result.
_____________________________
We all need somewhere to live – but do we all need a CBD apartment?Hey BRC,
I would get the bank to pay for that cost or valuation for refinance, generally they waiver that, sure they will if you indicated your looking at other financial means.
It is bad they dont tell you what their value is, think they only kinda indicate if it is out by more than 20 % either way, even then its just like watching the credits of your movie, no deal hahahaha
Good luck with it.
Before you accept the offer, have u thought of approaching other lenders to see if they can match deal or better it ! You may be surprised, my bank inital offer wasn’t the best then neg time came in, very suprising how flexible they can be when the want
No, I haven’t spoken to other lenders as it is not a full refinance, merely an adjustment of limits with the current line of credit I have on the place, but I might look at fixing part of it into a fixed rate mortgage, and leaving a certain amount as a line of credit.
I want to stick with this bank for the moment as they seem to understand me well. I’ve recently started working for myself and my immediate cashflow looks pretty dire. I’ve spoken to other banks about getting a new residential loan for a PPOR recently and they basically told me ‘hah, after you start making some money again’. The one I am with seems comfortable with my history.
_____________________________
We all need somewhere to live – but do we all need a CBD apartment?
You must be logged in to reply to this topic. If you don't have an account, you can register here.
