Why refinance an investment property?
To save money or to improve your cash flow. With interest rates as low as they are now, refinancing an investment property could be a smart business decision.
What loan program is best for refinancing my investment property?
That depends on your situation, but here are a few options:
- A HARP Refinance is great for people stuck with a devalued property.
- A rate and term refinance is the standard go-to for refinances. It should help you get a lower interest rate and allow you to adjust the term of your loan.
- A cash-out refinance might be worth considering if you’re interested in taking money out of one property to put toward another.
Keep in mind, though, that some programs, like VA loans, are only available for primary residences.
Okay. What else should I know?
Refinancing an investment property isn’t exactly the same as refinancing a primary property. There are some extra qualification requirements you should know about:
Higher LTV requirements. LTV stands for loan to value ratio. The higher the percentage, the riskier you are to a lender. Most lenders require investment properties to have an LTV of 75%, or even lower in certain situations.
Higher interest rates. Lenders take risk into consideration when they do the math on your interest rate. Often, the rate they offer for a second property will be higher than it might be for a primary residence
Other requirements. Some lenders have other requirements, like six months or more of mortgage payments already in the bank, or documentation that proves rental income.
Why use Total Mortgage?
We’re fantastic at what we do, and all we do is mortgages.
- We have some of the lowest interest rates in the country, which can save you heaps on your newly refinanced loan.
- Our loan officers will educate you as you move through our process.
- We aim to close most of our refinances in thirty days or less—and you’d be surprised how often we succeed.