Is 2021 a Good Time to Refinance Your Investment Property?
After the devastating effects of Covid-19 during last year, 2021's mortgage rates are at record lows right now, and experts predict they'll stay that way for the rest of the year. If you are a property investor, seeing different companies offering low rates, might be tempting to you, especially if you took out a mortgage a few years ago when rates were a lot higher, in the 4% to 7% range.
This situation makes you think: is 2021 the right time to refinance my investment properties? If your portfolio has mortgaged properties with higher interest rates, it's worth considering it, however, make sure to ask these questions to yourself and to your lending expert before pulling the trigger:
1. Will I qualify for lower rates?
As you may know, not everyone is eligible for getting lower rates on the mortgages they already have. Verify your credit is not delinquent, and have a solid score, lenders would like to see a score of 740 or higher. The health of your business could also be an important factor for the lender to assess the risk of your refinancing request.
2. Am I in need of a better cash flow?
One of the biggest benefits of refinancing is that it can free up cash by lowering your interest rate and allowing a lower monthly payment, giving you more cash flow to put back into your business.
3. Do I have the money for the closing costs?
Refinancing doesn't mean you won't have to spend a dime up-front. Usually, depending on the deal you get, you can expect to pay anywhere from 2% to 5% of the loan balance in closing costs.
4. What do I want to accomplish?
Evaluate how refinancing one or several of your investment properties is going to help your finances and your business, both now and in the long run. Our experts at Regal Group International can help you assess your expectations and ensure refinancing is the right decision before you move forward.
In summary, 2021 seems to be a good year for lower mortgages rates, and it could be a great time to refinance, but understanding your goals, your current financial stability, and the future of your business, and your finances, is a must. Talking to one of our experts can help point you in the right direction, we are here for you, because when you do business with Regal, you're part of our family.
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