Can I refinance an investment property?

Question

I bought an investment property almost 2 years ago and I am considering refinancing due to the super-low rates and an increase in my credit score. The goal is to reduce my monthly payment so I get better cashflow. On the mortgage serving firm's website, it says that only primary residence can be refinanced. Is that true for all lending firms?

Alex Olson · Answer

Account Closed Yes you can. It is a called a cashout refinance. If it is a federallly backed loan like a fannie mae or freddie mac, it may be a bit more difficult but can be done. Call 3 of your local lenders in the area and ask if they do cash out refinances on investment property. If they don't, ask who does. This will get you in the right direction. Hope this helps!

Adam Martin · Answer

I just completed one last week so it can be done but it is hard to find a lender who will do it.  I researched online/ called over 15 banks both national and local.  Of those 3 local credit unions said they would do it but 1 was a 20 year arm, 1 was a fixed 20 year, and the last one that said yes I have worked with in the past and they agreed to a 30 year with a rate of 4.75.  Keep looking, avoid big banks, and good luck.

Anthony Wick · Answer

@Iair Oren

I’m closing on two cash out refinances next week. Now, this is with a local bank, and they were the ones that held the original note. I’m getting better interest rates and terms. Cashing out some money, and the mortgages are lowering. Also doing some refinances on other rentals and my personal home. Just waiting for appraisals to be done. Those guys are very backed up right now.

Michael Cross · Answer

Credit unions and regional banks are your best bet for low fixed rates for a long period of time. You might have to call around and hear no a lot but i have found some that will do up to 75-80% LTV refinance. Keep in mind that these banks have investment strategies themselves - one year their focus might be on more retail real estate clients and some years more 1-4 unit investment clients. Just remember you want to talk to the commercial loan department. Talk to your Property Manager, Real estate Agent and your Settlement office - they will likely have recommendations.

Anthony Wick · Answer

@Michael Cross

Agree with you. The terms I am getting are cash out 80% LTV, 25 year amortization, 3.6% interest, 10 year balloons. Commercial loans in LLC, but fully backed by partners personal guarantees.

Account Closed · Answer

Awesome, knowing you have done it in the past week makes me very optimistic.

I will start looking for lenders now. Thanks, @Adam Martin !

Account Closed · Answer

Thanks, @Alex Olson! Great news and useful information.

Can I refinance an investment property?

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