This was a cash out refinance for a couple of our best referring commercial real estate agents. They had purchased the building less than two years ago and since then they improved rents and their goal was to cash out and improve the rate & terms. We had financed this building when they bought it and at that time we put them into a program that had a soft prepay as part of our planning ahead.
The biggest challenge was that due to the Covid-19 pandemic lenders were lowering their maximum allowable loan to value on cash out refinances. Additionally, many lenders were just on pause or raising rates to put a halt on new originations.
We identified the best lender for this transaction whereby we were able to lower the rate from 4.25% to 3.75% and while allowing for some cash out. Ultimately the borrowers needed to choose what was more important, cash out or a better rate and terms. The deal closed and everyone was happy.