Refinance Investments at the Best Interest Rates
Real estate investing has become very popular in recent years. With all kinds of “no money down” real estate courses being sold on infomercials and in every home-based business or investment publication out there, people have been rushing to buy property for investment purposes. Unfortunately, many of these people are not savvy about interest rates and are doing themselves a disservice by not refinancing some of their investment property home loans.
Refinancing an investment property can be complex, but there are a few things you can do to make sure you do it at the right time and get the lowest interest rates possible. The key is to stay on top of mortgage industry trends and know when to go deeper and consider a refinance.
The first thing is, do your homework. Interest rates are constantly changing. The current rate for this morning may change for this afternoon! Unless you know what it is, you don’t know if you’re getting the best deal or not. And it makes a big difference! Small interest rate adjustments can make a difference of tens of thousands of dollars in total payments over the life of the loan. Read financial news. Keep track of mortgage interest rate trends, especially in your country or local area. An educated consumer is a smart consumer. This applies to loans, as well as any other item purchased.
Second, use a mortgage broker. These trained professionals know exactly how to get the lowest interest rates possible, no matter what your specific circumstances. If you have poor credit or are self-employed, you have a unique situation that brokers are trained to handle. They have access to thousands of lenders, each with many different programs. They know how to evaluate these programs and find one that fits your needs. Combined with your own expert knowledge of current economic trends, using a mortgage broker will help you immensely in finding the best refinance deal.
Third, buy as much as you can. “Discount” is a term used to describe taking part of the interest expense up front as “points.” The more you can do this, the lower the interest rate you’ll end up paying on the loan. This is always a good idea. Buy everything you can afford. It may cost a few thousand extra at closing, but you’ll save tens of thousands in interest payments over the life of the loan.
Go ahead, negotiate. It is not widely known that you can negotiate to reduce the interest rates on your loan. Talk to more than one lender, or even more than one mortgage broker. Make sure everyone knows you are talking to others. Point out that others have given you a lower rate. Don’t lie, but always be prepared to walk away. If you’ve done your homework and know what interest rates are going on, you’ll find that negotiating will get you to the lower interest rates you’re looking for.
These four tips will help you save thousands of dollars with the right refinance at the best possible interest rates for your investment properties.
