What happens when you refinance a rental property?

For those that purchased their investment property at a higher rate, refinancing could potentially save you thousands of dollars over the life of the loan. By lowering your interest rate, investors will also be lowering their monthly mortgage payments.

What can I do with my Equity when refinancing my home?

When you refinance, you may be able to secure a lower interest rate or change the terms of your loan. You can also take money out of your accumulated equity using a cash-out refinance or home equity loan. Many investment property owners refinance to make improvements to their properties, increasing both rental and market values.

Do you have to live in house after refinancing?

You must live in the house for a year after refinancing in most cases to get an owner-occupied loan. What are the risks? A cash-out refinance will increase the amount of the loan you have on your rental property. For some people who are averse to risk, paying off their home is a great option and they may not want more debt.

Why did I not qualify for refinancing my mortgage?

Even those who opted for traditional fixed-rate mortgages may have sapped their home equity by cash-out refinancing repeatedly. Regardless of how, many of these homeowners found that they didn’t qualify for a traditional refinance thanks to their inflated LTV.

Why did I get denied for refinancing my property?

Issues in these two areas — too much debt, too little credit — are the two main reasons refinance applications get denied. If necessary, work to pay down large debts or raise your credit prior to refinancing your investment property. You’ll be more likely to qualify, and get a lower rate to boot.

Can you refinance if you have two mortgage payments?

Two mortgage payments can be unsustainable, so you might want to search for a lower rate by refinancing. Refinancing can give you access to lower rates if you can show that you are successfully managing your rental property.