When Is It Time to Start Looking for Investment Property Refinance Loans

Posted on: December 30, 2011

Categories: Buy, Commercial Building

Author: lbuen

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Lenders make it a point to offer spanking investment property loans like shiny brand new cars. They polish rates and loan terms just like car dealers rub down car hoods to make their offerings attractive to would-be buyers. The time you obtained your investment property mortgage, market conditions may have worked to your advantage with the terms that you got. However, as time went by and the landscape of the real estate market shifted, the loan terms may no longer be working in your favor. Let us take a peek at the signs that it may be time to take action and begin keeping your eyes peeled for investment property refinance loans.

1. Start looking for investment property refinance loans when rates are going down

You may have been lured to purchase your investment property due to its very attractive rate. However, as market conditions shifted, the low initial rate that you were once enjoying may have become a burden to you. Investors with adjustable rate loans may be lugging higher interest rates as general interest rates rise. Good thing for them though since now is the season for falling interest rates. But if you have fixed interest rate loans, the drop in interest rates may be tempting for you to consider other investment property refinance loans with lower rates. By refinancing, you can find ways to leverage the equity in your investment property, reduce monthly payments and boost cash flow.

2. Start looking for investment property refinance loans when you need to boost cash flow

Savvy investors know that cash flow is the lifeblood of their rental property business. A re-fi can inject more cash flow into your business provided that you have accumulated substantial equity (between 20 to 50 percent) in the property. You can convert this equity into cash through a cash-out refinance loan or boost cash flow by opting for an investment property refinance loan with a more affordable rate to reduce your monthly mortgage payment.

3. Start looking for investment property refinance loans when you want to purchase another investment property

The low interest rates may also be luring investors to purchase additional rental properties. You can make use of the equity you have built on your present property to buy another investment property through a cash-out re-fi.

4. Start looking for investment property refinance loans when you need to renovate your rental property

When your rental property needs a facelift, you can tap the equity you have built up to finance the renovations. Remodelling the bathrooms, replacing the roofs, upgrading the doors, floors, kitchen appliances, repainting or re-siding the building or house, can spruce up not just your building apartment, but your finances, as well, because it enhances cash flow. Rehabilitating your property will add to its market value. This gives you the prerogative to increase monthly rental, hence, also boosting cash flow.

5. Start looking for investment property refinance loans when you need funds for other important expenses

Should you need extra funds to finance certain expenses, such as the college tuition of your kids, investing in stocks and other markets, or consolidating debt, you can take out cash by refinancing your mortgage. Just make sure though that you use the cash you get for important expenses only since you are putting your investment property on the line. Would you risk losing your rental property just to buy a new boat for recreation? Don’t do this unless you can really afford the expense.

 When Is It Time to Start Looking for Investment Property Refinance Loans
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