In a previous article, I discuss why it’s important to refinance your mortgage before leaving your job. No job = no recurring income = high risk = no mortgage refinance for you! You won’t even have the ability to compromise and pay a higher lower rate than if you did have a job. When you lose your W2 income, you turn invisible to the banks. Think, “You are dead to me.”
The other important refinancing situation to consider is when you are planning to turn your primary property into a rental or vacation property. You might have outgrown your existing property, but don’t want to sell given you believe real estate is a great long term wealth builder. Perhaps your company is relocating you for a better opportunity and you plan to return one day. Finally, maybe you’ve been forced to downsize and have no choice but to become an accidental landlord.
Whatever the case may be, always, always, always refinance your rental property before it becomes a rental property! If you don’t, you may miss an opportunity to save thousands of dollars in interest costs. This article will explain to you why rental property mortgages are higher than primary property mortgages by a common spread of 0.5% up to 1%.