Hello everyone, I took out my first commercial loan a few years ago for a multi-family. It's 30year amortization, but first 5 years were fixed and on the 6th year it will auto adjust to the libor rate plus 2.25%, then auto adjusts every 6 months after that until the 30yrs are up.
I am coming close to the 5th year and thinking out my options. To refi will cost me around 12k closing cost and rate will be close to 4% for another 5 years. Not sure it is worth it.
But my biggest question is if it's worth it based on how the first few years of loans always have more interest than principal. I feel like if I refinance, I will be "resetting the clock" if that makes sense. And in the long run will wind up paying more on my loan.
Any thoughts on the above?
When you will compare your amortization table of current loan and future loan you will understand the difference and your question will be answer through that table only. About resetting the clock:- When you have use 5 years of 30 years amortization your MLO can offer you different amortization table which can add value in this refinance.