Refinance Investments at the Best Interest Rates
Real estate investing has become very popular in recent years. With all sorts of “no money down” real estate courses being sold on infomercials and in every home-based business or investment publication out there, people have rushed to buy properties for investment purposes. Unfortunately, many of these people are not knowledgeable 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 ensure 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 dig deep and consider refinancing.
The first thing is, do your homework. Interest rates are constantly changing. This morning’s current rate may change by 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 adjustments in interest rates can mean a difference of tens of thousands of dollars in total payments over the life of the loan. Read the financial news. Track mortgage interest rate trends, especially in your country or local area. An educated consumer is a wise consumer. This applies to loans as well as any other purchased items.
Second, use a mortgage broker. These trained professionals know exactly how to get the lowest interest rates possible, no matter what your specific circumstances are. If you have a poor credit rating 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. “Taking down” is a term used to describe taking some of the interest expense up front as “points.” The more you can do this, the lower the interest rate you will end up paying on the loan. This is always a good idea. Buy as much as 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 lower 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 current interest rates, you’ll find that negotiating will get you the lowest 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.