Refinancing An Investment Property Can Lower Your Rate & Tap Into Your Equity
Refinancing a loan is when you replace the current financing of a property with a new loan, often with another lender, but not always. There are two main types of refinance loans: a rate & term refinance, and a cash-out refinance.
A cash-out refinance can happen in two situations including: (1) replacing an existing loan with a new, larger loan and putting the difference in your pocket, or (2) taking out a new loan on a property that you currently own outright and putting the cash in your pocket. Cash-out refinances are very popular among Visio borrowers as a means to grow their rental portfolios. Often our investors will use cash-out refinances to buy new investment properties, finance a flip, or finance a renovation to raise their rents on the property financed or another rental property they own.
Why You Should Work With Visio Lending
We Specialize in Rental Loans
Visio Lending’s laser-like focus and rental loan expertise simply cannot be matched. Would you go to a foot doctor for a headache? Or an employment attorney for a divorce? There is something to be said about going to a specialist for the specialty you need.
Let’s get specific. Here are few ways Visio’s focus helps you:
Insurance: Insurance on a rental property is quite different from your personal home. Even many insurance agents who don’t regularly deal with rental properties don’t understand the nuances. Visio has a dedicated team that can help you properly insure your rental property investment and protect you against some of the not-so-obvious risks you may encounter as a real estate investor.
Vacation Rentals: Visio is one of the leading financiers of vacation rental properties in the U.S. Underwriting these properties for permanent mortgage finance is more of an art than a science. Nonetheless, Visio has developed a proven methodology to underwrite these properties to get you the best terms possible while also writing a responsible mortgage loan.
Cross-defaults: Many owners of rental properties also engage in fixing and flipping properties. If that’s you, you might think twice about financing both your rentals and your flips with the same lender. Flips are subject to much greater market risk than rentals. Even the best flippers have deals that go sideways or the wrong way. Many lenders include cross-default provisions in their loan documents that provide that if you default on one loan it also counts as a default on all of your other loans. You don’t want to have a bad flip deal trigger a default on your rental properties.