Refinance Mortgage Rates for Rental Property

Even if the property is occupied by tenants and you really never get to call it your primary residence, you can still refinance it. You have to bear in mind though, that new restrictions apply to this scenario and you might have a harder time finding a lender who will finance this kind of mortgage. If you follow the tips given below, you can lower your refinance mortgage rates for rental property or you can even cash out some of the equity that your rental home may have.

Refinance Mortgage Rates Rental Property Considerations

If you are planning to refinance your rental property, there are certain things that you need to do in order to make the process a little smoother for you. Here are some tips:

1. Upgrade the property

Refinance rates are often based on the equity that your property may have. When you make some improvements like changing the fixtures, putting some new appliances and improving the exterior decorations, you raise your property’s appraised value. This will make you a less risky borrower and you can avoid paying high mortgage insurance.

2. Keep a record of all income and maintenance spending

It is very important for a small business to keep a track record of all income flow so that you will not have a hard time proving it to prospective lenders. Also maintaining a strong relationship with your tenants is a plus and other times you may find refinance deals more quickly approved.

3. Be ready to pay higher rates

In every deal with the bank don’t forget to haggle, because as per most experts’ advice, most of the banks nowadays charge you with a full point in addition to the interest in your loan. Absentee owners have lesser to lose when a foreclosure happens than primary homeowners even when there are tenants that are evicted in the process, so even if you can haggle with your lender, don’t expect to get the lowest rate you see advertised.

4. Shop around for better rates

We may be warning you to expect to pay higher rates but that does not mean you don’t llok for better rates. After all, you would want to refinance to find better rates. Use your connections and scour the Internet for the lowest mortgage rates. You may have a better chance with mortgage companies specializing in investment property than traditional lenders.

Following these tips will help you find better refinance mortgage rates for rental property. Although it can be difficult and finding the right lender might be equally tough, it’s not impossible. With a little persistence and together with these tips, you can definitely refinance.

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