Mortgage rates are historically low, and homeowners have no better time to refinance their properties. A Freddie Mac survey from 2020 revealed that the average interest rate on fixed-rate mortgages had dropped by 50% between 2010 and 2020. Although these rates have skyrocketed in 2022, the current sub-6 % rates still represent a vast improvement from what was available in the 90s and early 00s.
Refinancing your property allows you to get better terms than you did when you initially took out your mortgage. However, there are several factors you must consider before refinancing your property, especially if it is an investment property, to ensure that you are making a wise investment. One of these considerations is who to refinance with. You may refinance your property through a traditional bank or other lending institutions. Each lender has its specific benefits that may make them attractive. This piece looks at the different banks that offer refinancing for investment properties and how to pick the best bank to refinance your investment mortgage.
Refinancing is defined as the process of replacing an existing mortgage. The refinancing process is typically carried out to take advantage of lower interest rates on the market but can also be initiated for other reasons, such as to shorten the term of the loan to offset it faster and save money.
A common question among investment property owners is, “can I refinance my investment property?” The answer is YES. Investment properties can be refinanced similarly to residential properties. However, the requirements for refinancing investment properties are different, and you often need to present more documentation. The process is typically simple nonetheless, and having a good bank or company makes it more seamless.
Refinancing your investment property offers many benefits. Some of the most obvious benefits and reasons for refinancing include;
Refinancing an investment property is not much different from refinancing a primary mortgage. However, the requirements are usually lightly different for an investment property refinance. Here are some requirements that banks look out for before approving your property refinance. Some of these requirements include;
Even though refinancing is generally beneficial, it is not always the case. Refinancing is costly, and you must consider it carefully before proceeding. Some questions you must ask and answer before refinancing your investment property include;
In essence, refinancing is a complex, expensive process. You have to do a careful financial analysis before going about it to ensure you get great value for the money spent.
When seeking to refinance an investment property with a bank, you have to research thoroughly to ensure that you get the best rates. The internet is a goldmine and your best friend when it comes to getting information on different lenders. Utilize the internet to research the rates and terms offered by different banks. The internet also provides many forums where you can interact with like-minded investors to get reviews of their experiences with different banks. However, be careful of predators on the internet who may seek to lure you with false advertising.
Another way to get reliable information is through word of mouth. When seeking to refinance, you can interact with landlords in your locale who have refinanced their property. Combining the information from different landlords can help you make an informed decision about the best banks to refinance with
There are two main factors to consider before choosing a bank to refinance with/ These are;
Once you have researched and picked your best choice, you may proceed with the refinancing process.
Not every bank or lender will take the risk of refinancing investment properties. Here are some of the best banks that will help with refinancing your investment properties
Citibank offers investors many advantages as a refinancing bank. First, Citibank offers different refinancing options, including rate-term refinancing and cash-out refinancing. Compared to other banks and non-bank lenders, Citibank has relatively lower interest rates and requests very small down payments (as low as 3%). With Citibank, you can get a refinance for an investment with a relatively low credit score (as low as 620), although higher credit scores are desired and help you get better rates.
Citibank offers terms of 10 to 30 years, with good payment plans to help save you costs. One major advantage of Citibank is its service and accessibility, with numerous online resources to help you determine your eligibility for refinancing and to help you through the process. Moreso, Citibank is currently running a promo that offers new investors $500 off on closing costs, while new and existing customers also get discounts on down payments and interest rates. You may begin a Citibank refinance application over the phone, online, or in person.
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Like Citibank, citizens bank provides ample online resources to get you acquainted with their current refinance rates. Citizens bank’s online page also helps you connect to a loan officer to answer your inquiries and discuss customizable refinance plans. Citizens bank provides a simple way for investors to apply for refinancing by using the online portal where they can complete their profile and upload the necessary documents. However, if you want to apply physically, you can visit any Citizens bank branch to begin.
Like Citibank, Citizens bank offers cashout and rate-term refinancing, with fixed-rate and adjustable-rate refinance.
On the downside, Citizens bank offers comparatively higher rates, with a 30-year fixed rate mortgage having an interest rate of 6.125% and an APR of 6.277%. However, the advertised interest rates on the Citizens bank website only apply to investors with a 740 credit score who make at least 25% down payment. The refinancing process with Citizens bank can take anywhere from 2 weeks to 45 days. Citizens bank operates in all 50 states of the USA.
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Capital bank allows you to refinance your property, whether you are consolidating debt or cashing out. Capital bank offers several options, from fixed-rate mortgages to adjustable-rate mortgages (ARM), home equity line of credit (HELOC), and even smart refinance
Capital bank refinancing works through an efficient online process known as the QuickClose digital process that enables you to verify your income and assets through your bank, connect to a loan officer t answer your query, make a refinance application, and track the entire process. Capital bank allows you to refinance your home even if you don’t have enough cash to make a down payment, although they require you to have a good credit score (typically up to 680) and a stable debt-to-income ratio. Capital prides itself in having a transparent refinance application process and has received numerous positive reviews for its efforts.
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US Bank
US bank offers various options for investment property loans and investment property refinancing. Like the other banks, the process can be completed entirely online, and the rates are pucblished for the different refinancing options. Although US bank has relatively higher rates, with up to 5.7% APR on a conventional 15-year fixed rate mortgage, it makes up by offering existing customers up to 0.25% discount on closing costs during refinancing.
Through its online platform, you can get in touch with a loan officer o attend to your queries and help you determine the refinancing option that is best for you. If you’re not comfortable making a refinance application online, you can schedule a call with a loan officer who will help you make an application over the phone.
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Once you have successfully selected the best bank to refinance your property, you can begin the finance process. Luckily, the banks listed here utilize an online process that makes the refinance applications seamless. The refinance process is as follows;
The entire process, from start to finish, may take between 2 weeks to 60 days (or more), depending on your lender. Ensure that you have enough time to answer queries and make multiple copies of your documents if you need to submit them. Also, ensure that you have enough cash at hand to cover the closing costs and other associated fees.
When you decide that it is time to refinance your investment property, it is pertinent that you carry out proper research to find the best bank that suits your unique circumstance. Different banks have different requirements and terms. With an excellent credit score, low DTI, high LTV, and proper knowledge of what you desire, you can meet the investment property refinancing requirement for virtually any bank. However, ensure that you research properly the rates and terms offered by each bank to avoid paying more than necessary. This piece provides you with some of the best banks to seek investment property refinance with; however, you should consult similar investors in your locale to find which banks or lenders offer the best rates around.
Looking for the best lender for an investment property refinance? Look no further than Aurum & Sharpe. Aurum & Sharpe provides a fine blend of cost and efficient service to ensure that you get the best experience e possible. We put all our customers first and guarantee you highly competitive rates to help you save money. Don’t qualify for an investment property mortgage? Aurum & Sharpe also offers excellent non-QM loan options for investment properties to help you achieve your dream of being a landlord.
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