Quick Ways You Can Refinance Your Property Easy

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Quick Ways You Can Refinance Your Property Easy

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Are you finding that the monthly interest payment on your rental’s mortgage is too much? Or do you want to simply keep more of your rent monies? Regardless of the reason you want to refinance, there are several approaches to renegotiating your loan that will help you to achieve your overall goals. Let’s look at some things you need to consider before beginning this process and some tips for rental refinancing.

Are you finding that the monthly interest payment on your rental’s mortgage is too much? Or do you want to simply keep more of your rent monies? Regardless of the reason you want to refinance, there are several approaches to renegotiating your loan that will help you to achieve your overall goals. Let’s look at some things you need to consider before beginning this process and some tips for rental refinancing.

Before You Start

Consider your “why.” Think about the reasons you want to refinance the mortgage for your rental. The answer(s) to this question will help to guide your choice of lender and new loan arrangement. You will also want to consider your long-term plans for the rental. A thirty-year fixed loan, for example, would likely be a bad idea if you want to sell the property within the next several years.

street sign about 30 years loan
street sign about 30 years loan

Before You Start

Consider your “why.” Think about the reasons you want to refinance the mortgage for your rental. The answer(s) to this question will help to guide your choice of lender and new loan arrangement. You will also want to consider your long-term plans for the rental. A thirty-year fixed loan, for example, would likely be a bad idea if you want to sell the property within the next several years.

Look at the financial landscape. It is generally suggested that one refinance when there are low-interest rates, and the property in question still holds a high value. Make sure that you observe this carefully, or you could find yourself in a worse situation with your home loan than before.

Collect the necessary documentation. There are several important documents to have ready before you refinance. These include rent receipts, tax returns, bank statements, and mortgage statements, among others.

Look at the financial landscape. It is generally suggested that one refinance when there are low-interest rates, and the property in question still holds a high value. Make sure that you observe this carefully, or you could find yourself in a worse situation with your home loan than before.

Collect the necessary documentation. There are several important documents to have ready before you refinance. These include rent receipts, tax returns, bank statements, and mortgage statements, among others.

ben franklin bills

Tips for Refinancing

Determine your equity. Take a hard look at your rental property’s equity. This is a crucial step for several reasons. Lenders typically want prospective refinancers of rental properties to have twenty-five percent or more equity in their property. The more equity you have, the more risk you will incur and the less likely you will be to default on your new loan. This, in turn, makes you more attractive to lenders.

Understand the ground rules. Though the rules of refinancing can vary, there are several guidelines that the majority of lenders follow. These rules include a credit score that is at least 660, as well as a 12-month payment history that demonstrates good faith and the ability to pay. Knowing these facts will help you to better prepare for your loan application.

ben franklin bills

Tips for Refinancing

Determine your equity. Take a hard look at your rental property’s equity. This is a crucial step for several reasons. Lenders typically want prospective refinancers of rental properties to have twenty-five percent or more equity in their property. The more equity you have, the more risk you will incur and the less likely you will be to default on your new loan. This, in turn, makes you more attractive to lenders.

Understand the ground rules. Though the rules of refinancing can vary, there are several guidelines that the majority of lenders follow. These rules include a credit score that is at least 660, as well as a 12-month payment history that demonstrates good faith and the ability to pay. Knowing these facts will help you to better prepare for your loan application.

Shop around for your best option. Depending on your purposes for refinancing, there are a wide variety of loan and lender choices. In addition to 15- and 30-year fixed-rate and adjustable-rate mortgages, there are government programs that could be a perfect fit for your refinance. Programs through Fannie Mae and Freddie Mac, especially HARP (Home Affordable Refinance Program), may be a huge help to you. Be sure to do your research to know everything that is available in this process.

Shop around for your best option. Depending on your purposes for refinancing, there are a wide variety of loan and lender choices. In addition to 15- and 30-year fixed-rate and adjustable-rate mortgages, there are government programs that could be a perfect fit for your refinance. Programs through Fannie Mae and Freddie Mac, especially HARP (Home Affordable Refinance Program), may be a huge help to you. Be sure to do your research to know everything that is available in this process.

Begin. When you are ready, take the plunge and apply at the institution of your choice. This involves a formal application and the accompanying documents we spoke of earlier. Upon receiving a loan application, lenders typically appraise the property and review everything that you have submitted. Hopefully, at the end of this process (typically around a month to six weeks), you will be refinanced!

type writer - chapter one
type writer - chapter one

Begin. When you are ready, take the plunge and apply at the institution of your choice. This involves a formal application and the accompanying documents we spoke of earlier. Upon receiving a loan application, lenders typically appraise the property and review everything that you have submitted. Hopefully, at the end of this process (typically around a month to six weeks), you will be refinanced!

Refinancing is an incredibly beneficial move for many rental property owners. However, it is important to understand the refinancing process and everything that is involved with it. Such insight helps one to avoid any pitfalls and achieve their goals in refinancing. Regardless of why you’re choosing to refinance your rental property, ApplyConnect will help safeguard your investment with the power of tenant screening.

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Refinancing is an incredibly beneficial move for many rental property owners. However, it is important to understand the refinancing process and everything that is involved with it. Such insight helps one to avoid any pitfalls and achieve their goals in refinancing. Regardless of why you’re choosing to refinance your rental property, ApplyConnect will help safeguard your investment with the power of tenant screening.

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Get Started with ApplyConnect!

The nation’s most trusted tenant screening for real estate agents, landlords, and property managers. No cost background checks available 24/7.

©2018 ApplyConnect. All rights reserved

ApplyConnect marks used herein are trademarks or registered trademarks of applyconnect.com. Other product and company names mentioned herein are the property of their respective owners.