Refinance Investment Property

With investment property loan rates at all time lows, there is not better time than now to refinance an your investment property. There are many benefits associated with investment property refinance. However, as with all financial decisions, you should carefully evaluate your situation before making that choice.

Benefits of Refinancing Investment Property

Lower interest rates

By refinancing your investment property, you can take advantage of the decrease of interest rates, enabling you to pay more money on the principle of your loan.

Greater rental income

Lower mortgage rates for investment property increases your potential to receive more income from the rental fees.

Buy another investment property

Some investment property refinance programs allow you to take money out of the investment home's equity in the form of cash, which you can then use as a down payment for a second investment property.

Pay off mortgage on investment property

Refinancing investment property can help you pay off the mortgage on that property sooner, saving you thousands of dollars in interest fees.

Build equity faster

Changing your investment property mortgage from a 30 year loan to a 15 year loan will help you build equity at a faster rate.

What to Consider When Thinking About Investment Property Refinance

More is required for refinance investment property

Investment property mortgages are thought of as riskier by lenders, and therefore, they may have higher requirements for you to meet, such as a specific credit score, appraisal of the property, higher reserve requirements.

Loan-to-value

Most lenders will only allow you to apply for mortgage as long as it is below 75% of the value of your property. For example, if your investment property has a value of $500,000, then the highest amount you will be able to apply for in refinancing is $375,000. This can hurt you if you owe more than $375,000 on the investment property.

Charge for early repayment

Before you start looking for investment property refinance, it is important to evaluate the terms of your current mortgage to make sure that there are no charges for early repayment of the mortgage.

Investment property loan rates are at their lowest

If you meet the qualifications for refinance, you will benefit from the fact that investment property loan rates are currently at all-time lows and First Rate Mortgage offers the lowest rates in the industry. These conditions make this perfect time to refinance your investment property.

Cash Out refinance adds to your principal

One of the options available for investment property refinance is cash out refinance, which allows you to take cash out of the properties equity. However, before you decide to take this route, it is important to remember that the amount you borrow will be added to the principal of the mortgage for the investment property.