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Can You Refinance Rental Property Loans?

Can You Refinance Rental Property LoansRefinancing Rental Property Loans

Refinancing a mortgage for your primary residence is relatively common, but what about refinancing rental property loans? The stock market changes all the time, which means interest rates change over time, too. This could lead to lower interest rates for some borrowers.

If you want to know if you can refinance a rental property, this comprehensive guide will cover why you might want to look for new offers as well as ways you can approach an investment property to refinance. You’ll also learn how to find the best refinancing offers for your property.

We are your investment property refinance lenders! Keep reading to learn more about the best investment property refinance loans.


Why You Want to Refinance Rental Property Loans

There are a number of reasons that people want to refinance their mortgages and many of those same reasons apply to investors who want to refinance rental property loans. Some of the most common reasons that people want to refinance include:

  • Lower interest rates: One reason you might want to refinance rental property loans is to secure a lower interest rate. This is especially important if you took out a loan when the stock market was in decline or if your credit has seriously improved since you took out the original loan.

  • Reduced monthly payments: Another reason that a property investor might want to refinance their rental property loans is to lower their monthly payments. While this might extend the length of the loan and total loan costs, it can be an effective way to optimize your cash flow.

  • Cash-out offers: Certain types of investment property financing options might allow you to take advantage of cash-out refinancing offers. Blanket mortgages are one type of rental property loan with this particular feature.

You should only refinance rental property loans if it serves a goal. That is, you don’t want to go through that process if it’s going to increase your costs without providing any tangible benefits.

3 Steps to Refinancing Rental Property Loans

If you are certain that you want to refinance your rental property loan, there are a few steps you’ll need to take to make the process a little bit easier.

1. Determine your goal for refinancing the property.

This is basically where you need to decide the reason you want to refinance your rental property. Are you trying to reduce your total loan costs, or do you want to increase your monthly revenue? Do you need cash for another investment opportunity?

You need to know your goal for a couple of reasons. First, it will help you decide if an offer is worth it or not. Second, it will help you decide whether you want to simply refinance with your current lender and loan type or if you want to look at other options.

2. Decide what type of investment property financing you need.

There are different investment property financing options depending on the type of property you want to purchase and how you plan to pay back the loan. You might want to refinance a conventional mortgage on a single-family home but find that a home equity loan offers more value.

Alternatively, you might not have many options for rental property loans. If, for example, you live in a state that doesn’t allow Airbnb, you won’t be able to use Airbnb loans to refinance your property. If you have a blanket mortgage, you’ll have to refinance with another blanket mortgage in most cases.

3. Compile a list of potential rental property lenders.

The last step, and arguably the most tedious and important, is to put together a list of your potential loan options. You need to list out all of the loan terms, including your APR, the length of the loan, and any other fees. You’ll also want a column for your current loan costs.

In addition to this information, you should calculate how much you’ve already paid for the loan and how much you’ll pay with the refinance. You might also want to update your rental income projections if there has been a significant change in the market or value of the property.

Tips for Finding the Best Offers to Refinance Property Loans

Depending on the type of property you want to refinance, there are options available for refinancing property loans. It can, however, be hard to know how to find the best offers for your investment property financing needs.

Before you start applying for refinancing offers, review these three tips to improving your chances of getting the most competitive rates:

  • Check your credit score: In most circumstances, though not all, your credit score will be a critical factor in determining your refinancing offers. This means you need to routinely check your credit and deal with any discrepancies that might prevent you from getting approved for the best rates.

  • Review any income changes: As with your credit score, income is an important component of being approved to refinance rental property loans. If you were new to investment property in the beginning, you might be able to use your rental income to improve your loan choices.

  • Note any property improvements: The value of your property is another crucial consideration for refinancing a rental property. Property values change based on the market but also based on any improvement you make. A higher property value can increase your loan approval amounts.

Another thing to consider is the relationship you have with your current lender. You’ll have better refinancing offers if you’ve been making your payments to them on time.

How to Choose the Right Refinancing Offers

With a list of some potential refinancing options, you’re ready to make the final decision. It can be difficult to narrow down the right choice, especially if you have offers with comparable rates and features. The right refinancing offer will achieve the goal you set in step one of this guide.

A solid plan is crucial to refinancing a rental property. Understand your goals and find ways to improve your financial situation so you can get the most competitive rates.

Trying to decide if you can refinance rental property loans? Rental Home Financing might be able to help you reach your new investment goals with our selection of loan options.


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About Rental Home Financing:

Rental Home Financing, as the best mortgage lenders we originate rental home loan products and cash out refinance investment property loans as the best investment property refinance lenders. Commercial blanket loans are available with a commercial purpose to suit your needs.

Also, as DSCR loan specialists, we are currently authorized to make such loans in most all areas of the United States. Specific circumstances will determine whether we have the ability approve/close portfolio rental home loans in your state(s). When you are ready to get a mortgage for rental property, we are ready to serve you.

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