Last year, home values increased 20% based on data from CoreLogic, which means it is time to cash out and evaluate their rental property refinance rates.
In that way, we can use the cash to purchase more investment properties, especially with the mortgage rates still low.
Other Benefits from Rental Property Refinance Rates
Besides taking the cash and buying more investment properties, we can also shorten the loan terms and reduce the interest rates. If you did everything right, you could also lower your costs and gain higher profits, not bad, right?
Pros And Cons of Rental Property Refinance Rates
Before even considering doing rental property refinance, you should know the pros and cons of it. To learn more about its advantages and disadvantages, read this article till the end.
Pros of Rental Property Refinance Rates
Here are several pros of refinancing your rental property.
- You could save a large amount of money if you turn out to qualify for a lower interest through refinancing. Since lower interest is generated with lower monthly mortgage payments.
- You can do finance property improvements, that way after the renovation is finished, you can charge a higher rent
- Besides gaining cash that you can use for buying other investment property, you could also replace the current mortgage with a larger one.
Cons of Rental Property Refinance Rates
Whenever there’s a pro, usually the cons follow. These are some cons of rental property refinance rates.
- In order to qualify for a rental property refinance, you have to increase a higher credit score, add more income, and also lower your loan-to-value ratio.
- If you choose to refinance your mortgage, then you will have to pay closing costs and fees from your savings.
- You may have to pay higher payments on your rental property than on your primary homes.
Things You Need to Know for Refinancing a Rental Property
Considering refinancing your rental property? Here is some guide you need to know first.
- Increased knowledge of rental property refinance rates.
- How to refinance your rental property qualifications.
- Prepared documentation that is needed to refinance a rental property.
- Find the reason why you have to refinance your rental property.
- Pros and cons of rental property refinance rates.
After you do everything mentioned above, you will know your rental property refinance rates. Gain more knowledge yet? Good, for the next one, you should learn about HELOC for investment property.
Familiar with that one? Not yet? Find out more about it from other articles if you are curious.