I get asked often by borrowers “if right now is the right time to refinance my mortgage?” Presently, interest rates are not very low so now may not be the time to consider doing a mortgage refinance. With that said, there are plenty of reasons that it could be in the best interest of the borrower to refinance now.
When to refinance my mortgage
- When the interest rate you are going to refinance into is less than your present rate.
- Second reason, is if you are taking years off the mortgage. It is often a good idea to lower the amount of years on your present mortgage. By doing so, borrowers may save up to tens of thousands on their mortgage by simply taking 5 years off of their loan.
- The third reason to refinance is if you are taking out money (cash-out) in order to buy more real estate and/or increase wealth.
What types of properties can be refinanced?
All investment properties can be refinanced. Borrowers will want to make certain that their property is turn key. Meaning, that the property will pass an appraisal. Commercial property, investment real estate, as well as single family homes can all be refinanced.
Is it easy to do a cash out mortgage?
The answer is yes. A cash out refinance is no more difficult than a rate/term refinance. 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 or other loans or if they are using the cash to buy more real estate.
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?
Call us today for a free consultation or click here to get pre-approved. We specialize in commercial mortgage refinances and are waiting or your call.
Thanks,
Michael Meyer
President Spartan Commercial Mortgage Services
mike@spartancommercialmortgage.com
(860) 876-0572