Presently, interest rates are a bit all over the place. But, the good news is that we believe rates are beginning to drop and we are hoping they keep heading downward throughout 2025. There are some things though that borrowers should know about refinancing before they start the process.
When to do a Mortgage Refinance
- When the interest rate you are going to refinance into is less than your present rate. This is called a Rate/Term Refinance
- Or, When you are lowering then years on your mortgage. This can save you tens of thousands of dollars.
- Or, When there is a true benefit; Consolidating Debt, Taking CasH Out to Buy Another Property, etc.
What types of properties can be refinanced?
The simple truth is that any property can usually be refinanced. Borrowers will want to make certain that their property is turn key. Meaning, that it will pass an appraisal and that no work will need to be done to the property in order to qualify for the loan. Commercial property, investment real estate, single family homes can all be refinanced.
Can a Cash Out Mortgage be done?
The answer is yes. On residential properties a cash out refinance is easily done, but the rate is always a bit higher than a non-cash out loan. A cash out refinance is usually most beneficial to a borrower when they are paying off high interest credit card debts and other loans. For a commercial mortgage, there is usually no difference in the rate if the borrower takes cash or doesn’t. What borrowers will want to be mindful of is the Loan to Value (LTV). Obviously your credit score is important for determining a rate. As well, your loan to value of the property determines what the interest rate will be. A good rule of thumb is that a borrower’s LTV should be 75% and under to still get a low rate when doing a cash out refinance.
So, How Do I Start the Mortgage Refinance Process?
To start the process all you need to do is click this link: pre-approved. We pride ourselves on customer service and will work with you every step of the way to get your mortgage refinances into a better situation. I look forward to hearing from you.
Michael Meyer
President Spartan Commercial Mortgage Services
mike@spartancommercialmortgage.com
(860) 876-0572