By 
Real estate investing has become very popular in recent years. With all kinds of “no down payment” real estate courses being sold in infomercials and in every home business or investment publication out there, people were rushing to buy property for investment purposes. Unfortunately, many of these folks are unfamiliar with interest rates and are doing themselves a disservice by failing to refinance some of their real estate investment mortgages.
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 possible interest rates. The key is staying on top of mortgage industry trends and knowing when to dig deeper and consider refinancing.
The first thing is to do your homework. Interest rates change constantly. The current rate this morning may change this afternoon! Unless you know what it is, you don’t know if you are getting the best deal or not. And it makes a huge 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. Keep track of trends in mortgage interest rates, especially in your country or local area. An educated consumer is a smart consumer. This applies to loans as well as to any other purchased item.
Second, use a mortgage broker. These trained professionals know exactly how to get the lowest possible interest rates, no matter your specific circumstances. If you have a bad 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 suits your needs. Combined with your own expert knowledge of current economic trends, using a mortgage broker will go a long way to helping you find the best refinance deal.
Third, buy as much as you can. “Buy at a discount” is a term used to describe taking some of your interest expense up front as “points.” The more you can do this, the lower the interest rate you end up paying on the loan. It is always a good idea. Buy all you can. It may cost an additional thousands at closing, but you will save tens of thousands in interest payments over the life of the loan.
Fourth, negotiate. It is not very well known that you can negotiate to reduce the interest rates of your loans. Talk to more than one lender or even more than one mortgage broker. Make sure everyone knows that you are talking to the others. Indicate that others have given you a lower rate. Don’t lie, but always be prepared to walk away. If you have done your homework and you know the current interest rates, you will find that negotiating will lead you to the lowest interest rates you are 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.