If you own an investment property, you may want to consider refinancing it to improve the return on your investment or to obtain cash.
Reasons for Refinancing a Rental Property
There are many reasons why investors want to refinance loans for rental property, including:
Lowering Your Interest Rate
Interest rates are still extremely low. If you originally financed your investment at a much higher interest rate, you can lower your interest rate or move from a 30-year to a 15-year loan.
Converting from a Variable- to a Fixed-Rate Loan
Many investors take advantage of a variable rate mortgage to reduce the initial costs of owning the property. However, if you plan to own the property for a long period and current interest rates are favorable, converting to a fixed-rate loan makes good sense.
Converting to an Interest-Only or Variable-Rate Loan
If you're planning to sell the property soon and you know you'll sell at or above what you owe on the property, you may want to convert to an interest-only or variable-rate loan. You'll save money with lower monthly payments until the property is sold.
Lowering Your Monthly Payment
If you want additional cash flow, the right type of refinance will give you the increase in cash flow you're seeking by lowering your monthly payment. In some cases, you may be able to remove the Private Mortgage Insurance (PMI) on your existing loan to lower your payments.
Cash-Out Refinance: Investment Property
When you hold enough equity in your property, you can obtain a cash-out refinance. You might want to retire debt, buy investment property or make improvements on the property you own.
Southpoint Loan Officers Guide You Through the Refinancing Process
Refinancing a rental property is different from refinancing a primary residence. Southpoint's experts can help you safely navigate the refinancing process.
Requirements are stricter than when refinancing a primary residence; which include:
- Six months of cash reserve
- High credit rating
- Lower debt to income ratio
- Lower loan to value ratio on the rental property
Fannie Mae options may be available to you for up to four-unit properties, which will save you money on your monthly payments.
Our in-house underwriters work hand-in-hand with loan officers to avoid unnecessary delays.
Visit our investor's page or call us at (800) 573-6247 to talk to a lender who has your best interest in mind and will streamline the refinance process.